At December 31, 2017, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows:   Category Plant Asset   Accumulated Depreciation and Amortization Land $ 182,000     $ —   Buildings   1,850,000       335,900   Machinery and equipment   1,475,000       324,500   Automobiles and trucks   179,000       107,325   Leasehold improvements   230,000       115,000   Land improvements   —       —       Depreciation methods and useful lives: Buildings—150% declining balance; 25 years. Machinery and equipment—Straight line; 10 years. Automobiles and trucks—150% declining balance; 5 years, all acquired after 2014. Leasehold improvements—Straight line. Land improvements—Straight line.   Depreciation is computed to the nearest month and residual values are immaterial. Transactions during 2018 and other information:   On January 6, 2018, a plant facility consisting of land and building was acquired from King Corp. in exchange for 32,000 shares of Cord's common stock. On this date, Cord's stock had a fair value of $60 a share. Current assessed values of land and building for property tax purposes are $246,000 and $574,000, respectively. On March 25, 2018, new parking lots, streets, and sidewalks at the acquired plant facility were completed at a total cost of $234,000. These expenditures had an estimated useful life of 12 years. The leasehold improvements were completed on December 31, 2014, and had an estimated useful life of eight years. The related lease, which would terminate on December 31, 2020, was renewable for an additional four-year term. On April 30, 2018, Cord exercised the renewal option. On July 1, 2018, machinery and equipment were purchased at a total invoice cost of $332,000. Additional costs of $11,000 for delivery and $57,000 for installation were incurred. On August 30, 2018, Cord purchased a new automobile for $13,200. On September 30, 2018, a truck with a cost of $24,700 and a book value of $10,400 on date of sale was sold for $12,200. Depreciation for the nine months ended September 30, 2018, was $2,340. On December 20, 2018, a machine with a cost of $20,500 and a book value of $3,150 at date of disposition was scrapped without cash recovery. Required: 1. Prepare a schedule analyzing the changes in each of the plant asset accounts during 2018. Do not analyze changes in accumulated depreciation and amortization. 2. For each asset category, prepare a schedule showing depreciation or amortization expense for the year ended December 31, 2018.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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At December 31, 2017, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows:

 

Category Plant Asset   Accumulated Depreciation
and Amortization
Land $ 182,000     $  
Buildings   1,850,000       335,900  
Machinery and equipment   1,475,000       324,500  
Automobiles and trucks   179,000       107,325  
Leasehold improvements   230,000       115,000  
Land improvements          
 

 
Depreciation methods and useful lives:
Buildings—150% declining balance; 25 years.
Machinery and equipment—Straight line; 10 years.
Automobiles and trucks—150% declining balance; 5 years, all acquired after 2014.
Leasehold improvements—Straight line.
Land improvements—Straight line.
 
Depreciation is computed to the nearest month and residual values are immaterial. Transactions during 2018 and other information:
 

  1. On January 6, 2018, a plant facility consisting of land and building was acquired from King Corp. in exchange for 32,000 shares of Cord's common stock. On this date, Cord's stock had a fair value of $60 a share. Current assessed values of land and building for property tax purposes are $246,000 and $574,000, respectively.
  2. On March 25, 2018, new parking lots, streets, and sidewalks at the acquired plant facility were completed at a total cost of $234,000. These expenditures had an estimated useful life of 12 years.
  3. The leasehold improvements were completed on December 31, 2014, and had an estimated useful life of eight years. The related lease, which would terminate on December 31, 2020, was renewable for an additional four-year term. On April 30, 2018, Cord exercised the renewal option.
  4. On July 1, 2018, machinery and equipment were purchased at a total invoice cost of $332,000. Additional costs of $11,000 for delivery and $57,000 for installation were incurred.
  5. On August 30, 2018, Cord purchased a new automobile for $13,200.
  6. On September 30, 2018, a truck with a cost of $24,700 and a book value of $10,400 on date of sale was sold for $12,200. Depreciation for the nine months ended September 30, 2018, was $2,340.
  7. On December 20, 2018, a machine with a cost of $20,500 and a book value of $3,150 at date of disposition was scrapped without cash recovery.


Required:

1. Prepare a schedule analyzing the changes in each of the plant asset accounts during 2018. Do not analyze changes in accumulated depreciation and amortization.
2. For each asset category, prepare a schedule showing depreciation or amortization expense for the year ended December 31, 2018.

 

### Depreciation and Amortization Schedule

**Objective**: For each asset category, prepare a schedule showing depreciation or amortization expense for the year ended December 31, 2018. **Note**: Do not round intermediate calculations. Round your final answers to the nearest whole dollar.

#### Asset Categories:

- Required 1
- Required 2

**Instruction**: For each asset category, calculate and list the depreciation or amortization expense for the year ending December 31, 2018.

---

#### CORD COMPANY  
**Depreciation and Amortization Expense**  
For the Year Ending December 31, 2018

| Asset Category              | Amount ($)                             |
| --------------------------- | -------------------------------------- |
| Land Improvements           |                                        |
| Buildings                   |                                        |
| Machinery and equipment     |                                        |
| Automobiles and trucks      |                                        |
| Leasehold improvements      |                                        |
| **Total depreciation and amortization expense for 2018** | **$ 0** |

Be sure to fill in each category with the appropriate depreciation or amortization amount, leading to a total for the year. 

This schedule helps in understanding how the value of different asset categories depreciates over the financial year, aiding in accurate financial reporting and analysis.
Transcribed Image Text:### Depreciation and Amortization Schedule **Objective**: For each asset category, prepare a schedule showing depreciation or amortization expense for the year ended December 31, 2018. **Note**: Do not round intermediate calculations. Round your final answers to the nearest whole dollar. #### Asset Categories: - Required 1 - Required 2 **Instruction**: For each asset category, calculate and list the depreciation or amortization expense for the year ending December 31, 2018. --- #### CORD COMPANY **Depreciation and Amortization Expense** For the Year Ending December 31, 2018 | Asset Category | Amount ($) | | --------------------------- | -------------------------------------- | | Land Improvements | | | Buildings | | | Machinery and equipment | | | Automobiles and trucks | | | Leasehold improvements | | | **Total depreciation and amortization expense for 2018** | **$ 0** | Be sure to fill in each category with the appropriate depreciation or amortization amount, leading to a total for the year. This schedule helps in understanding how the value of different asset categories depreciates over the financial year, aiding in accurate financial reporting and analysis.
**Required 1**

**Required 2**

**Prepare a schedule analyzing the changes in each of the plant asset accounts during 2018. Do not analyze changes in accumulated depreciation and amortization.**

---

**CORD COMPANY**

**Analysis of Changes in Plant Assets**

**For the Year Ending December 31, 2018**

|                        | Balance 12/31/17 | Increase | Decrease | Balance 12/31/18 |
|------------------------|------------------|----------|----------|------------------|
| Land                   | $182,000         |          |          |                  |
| Land improvements      | $0               |          |          |                  |
| Buildings              | $1,850,000       |          |          |                  |
| Machinery and equipment| $1,475,000       |          |          |                  |
| Automobiles and trucks | $179,000         |          |          |                  |
| Leasehold improvements | $230,000         |          |          |                  |
| **Total**              | **$3,916,000**   | **$0**   | **$0**   | **$0**           |
Transcribed Image Text:**Required 1** **Required 2** **Prepare a schedule analyzing the changes in each of the plant asset accounts during 2018. Do not analyze changes in accumulated depreciation and amortization.** --- **CORD COMPANY** **Analysis of Changes in Plant Assets** **For the Year Ending December 31, 2018** | | Balance 12/31/17 | Increase | Decrease | Balance 12/31/18 | |------------------------|------------------|----------|----------|------------------| | Land | $182,000 | | | | | Land improvements | $0 | | | | | Buildings | $1,850,000 | | | | | Machinery and equipment| $1,475,000 | | | | | Automobiles and trucks | $179,000 | | | | | Leasehold improvements | $230,000 | | | | | **Total** | **$3,916,000** | **$0** | **$0** | **$0** |
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