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FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Land Land improvements Building Equipment Automobiles Plant Asset Land Land improvements Building 470,000 $ 240,000 2,100,000 1,182,000 210,000 Equipment Automobiles Totals Transactions during 2021 were as follows: a. On January 2, 2021, equipment were purchased at a total invoice cost of $320,000, which included a $6,700 charge for freight. Installation costs of $39,000 were incurred. b. On March 31, 2021, a small storage building was donated to the company. The person donating the building originally purchased it three years ago for $31,000. The fair value of the building on the day of the donation was $20,500. c. On May 1, 2021, expenditures of $62,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather. The repair doesn't provide future benefits beyond those originally anticipated. d. On November 1, 2021, Pell acquired a tract of land with an existing building in exchange for 10,000 shares of Pell's common stock that had a market price of $40 per share. Pell paid legal fees and title insurance totaling $35,000. Shortly after acquisition, the building was razed at a cost of $47,000 in anticipation of new building construction in 2022. e. On December 31, 2021, Pell purchased a small storage building by giving $16,450 cash and an old automobile purchased for $24,000 in 2014. Depreciation on the old automobile recorded through December 31, 2021, totaled $14,700. The fair value of the old automobile was $4,950. Required: Prepare a schedule analyzing the changes in each of the plant assets during 2021. Accumulated Depreciation PELL CORPORATION Analysis of Changes in Plant Assets For the Year Ended December 31, 2021 Balance 12/31/2020 Increase $ 470,000 $ 482,000 240,000 2,100,000 0 20,500 359,000 57,000 362,000 417,000 124.000 1,182,000 210,000 $ 4,202,000 $ 861,500 $ Decrease Balance 12/31/2021 0 $ 0
Transcribed Image Text:Land Land improvements Building Equipment Automobiles Plant Asset Land Land improvements Building 470,000 $ 240,000 2,100,000 1,182,000 210,000 Equipment Automobiles Totals Transactions during 2021 were as follows: a. On January 2, 2021, equipment were purchased at a total invoice cost of $320,000, which included a $6,700 charge for freight. Installation costs of $39,000 were incurred. b. On March 31, 2021, a small storage building was donated to the company. The person donating the building originally purchased it three years ago for $31,000. The fair value of the building on the day of the donation was $20,500. c. On May 1, 2021, expenditures of $62,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather. The repair doesn't provide future benefits beyond those originally anticipated. d. On November 1, 2021, Pell acquired a tract of land with an existing building in exchange for 10,000 shares of Pell's common stock that had a market price of $40 per share. Pell paid legal fees and title insurance totaling $35,000. Shortly after acquisition, the building was razed at a cost of $47,000 in anticipation of new building construction in 2022. e. On December 31, 2021, Pell purchased a small storage building by giving $16,450 cash and an old automobile purchased for $24,000 in 2014. Depreciation on the old automobile recorded through December 31, 2021, totaled $14,700. The fair value of the old automobile was $4,950. Required: Prepare a schedule analyzing the changes in each of the plant assets during 2021. Accumulated Depreciation PELL CORPORATION Analysis of Changes in Plant Assets For the Year Ended December 31, 2021 Balance 12/31/2020 Increase $ 470,000 $ 482,000 240,000 2,100,000 0 20,500 359,000 57,000 362,000 417,000 124.000 1,182,000 210,000 $ 4,202,000 $ 861,500 $ Decrease Balance 12/31/2021 0 $ 0
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