ACCT 201 Study Guide - Midterm Guide: Accounting Equation, Accounts Receivable, Sarbanes–Oxley Act
Document Summary
Get access
Related Documents
Related Questions
i needhome / study / business / accounting / accountingquestions and answers / At December 31, 2017, Cord Company's PlantAsset And Accumulated Depreciation And Amortization ...
Your question has been answered
Let us know if you got a helpful answer. Rate thisanswer
Question: At December 31, 2017, Cord Company's plantasset and accumulated depreciation and amortization ac...
At December 31, 2017,Cord Company's plant asset and accumulated depreciation andamortization accounts had balances as follows:
| Category | Plant Asset | Accumulated Depreciation and Amortization | |||||
| Land | $ | 180,000 | $ | â | |||
| Buildings | 1,750,000 | 333,900 | |||||
| Machinery andequipment | 1,375,000 | 322,500 | |||||
| Automobiles andtrucks | 177,000 | 105,325 | |||||
| Leaseholdimprovements | 226,000 | 113,000 | |||||
| Landimprovements | â | â | |||||
Depreciation methods and useful lives:
Buildingsâ150% declining balance; 25 years.
Machinery and equipmentâStraight line; 10 years.
Automobiles and trucksâ150% declining balance; 5 years, allacquired after 2014.
Leasehold improvementsâStraight line.
Land improvementsâStraight line.
Depreciation is computed to the nearest month and residual valuesare immaterial. Transactions during 2018 and other information:
On January 6, 2018, aplant facility consisting of land and building was acquired fromKing Corp. in exchange for 30,000 shares of Cord's common stock. Onthis date, Cord's stock had a fair value of $40 a share. Currentassessed values of land and building for property tax purposes are$160,000 and $640,000, respectively.
On March 25, 2018, newparking lots, streets, and sidewalks at the acquired plant facilitywere completed at a total cost of $222,000. These expenditures hadan estimated useful life of 12 years.
The leaseholdimprovements were completed on December 31, 2014, and had anestimated useful life of eight years. The related lease, whichwould terminate on December 31, 2020, was renewable for anadditional four-year term. On April 30, 2018, Cord exercised therenewal option.
On July 1, 2018,machinery and equipment were purchased at a total invoice cost of$330,000. Additional costs of $12,000 for delivery and $55,000 forinstallation were incurred.
On August 30, 2018,Cord purchased a new automobile for $13,000.
On September 30, 2018,a truck with a cost of $24,500 and a book value of $10,000 on dateof sale was sold for $12,000. Depreciation for the nine monthsended September 30, 2018, was $2,250.
On December 20, 2018,a machine with a cost of $19,500 and a book value of $3,100 at dateof disposition was scrapped without cash recovery.
Required:
1.Prepare a schedule analyzing the changes in each of the plant assetaccounts during 2018. Do not analyze changes in accumulateddepreciation and amortization.
2. For each asset category, prepare a scheduleshowing depreciation or amortization expense for the year endedDecember 31, 2018.
I need help with thesecond requirement.
