The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2020: Plant Asset Accumulated Depreciation Land $ 400,000 $ — Land improvements 205,000 50,000 Building 1,750,000 355,000 Equipment 1,168,000 410,000 Automobiles 175,000 117,000 Transactions during 2021 were as follows: On January 2, 2021, equipment were purchased at a total invoice cost of $285,000, which included a $6,000 charge for freight. Installation costs of $32,000 were incurred. 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 $24,000. The fair value of the building on the day of the donation was $17,000. On May 1, 2021, expenditures of $55,000 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. 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 $39 per share. Pell paid legal fees and title insurance totaling $28,000. Shortly after acquisition, the building was razed at a cost of $40,000 in anticipation of new building construction in 2022. On December 31, 2021, Pell purchased a small storage building by giving $15,750 cash and an old automobile purchased for $20,500 in 2014. Depreciation on the old automobile recorded through December 31, 2021, totaled $14,000. The fair value of the old automobile was $4,250. Required: Prepare a schedule analyzing the changes in each of the plant assets during 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2020:

	Plant Asset	Accumulated Depreciation
Land	$	400,000	$	—
Land improvements		205,000		50,000
Building		1,750,000		355,000
Equipment		1,168,000		410,000
Automobiles		175,000		117,000

Transactions during 2021 were as follows:

On January 2, 2021, equipment were purchased at a total invoice cost of $285,000, which included a $6,000 charge for freight. Installation costs of $32,000 were incurred.
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 $24,000. The fair value of the building on the day of the donation was $17,000.
On May 1, 2021, expenditures of $55,000 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.
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 $39 per share. Pell paid legal fees and title insurance totaling $28,000. Shortly after acquisition, the building was razed at a cost of $40,000 in anticipation of new building construction in 2022.
On December 31, 2021, Pell purchased a small storage building by giving $15,750 cash and an old automobile purchased for $20,500 in 2014. Depreciation on the old automobile recorded through December 31, 2021, totaled $14,000. The fair value of the old automobile was $4,250.

Required:
Prepare a schedule analyzing the changes in each of the plant assets during 2021.

**PELL CORPORATION**

**Analysis of Changes in Plant Assets**
*For the Year Ended December 31, 2021*

| | Balance 12/31/2020 | Increase | Decrease | Balance 12/31/2021 |
|------------|--------------------|----------|----------|--------------------|
| Land | $400,000 | | | |
| Land improvements | $205,000 | | | |
| Building | $1,750,000 | | | |
| Equipment | $1,168,000 | | | |
| Automobiles| $175,000 | | | |
| **Totals** | **$3,698,000** | **$0** | **$0** | **$0** |

**Description:**

The table provides a summary of the plant assets for Pell Corporation for the year ending December 31, 2021. It lists various categories of assets with their balances as of December 31, 2020, and leaves spaces to record increases, decreases, and the ending balance for December 31, 2021.

- **Land:** Initial value at $400,000.
- **Land Improvements:** Initial value at $205,000.
- **Building:** Initial value at $1,750,000.
- **Equipment:** Initial value at $1,168,000.
- **Automobiles:** Initial value at $175,000.
- **Totals:** Total initial balance of $3,698,000, with all changes showing zero, indicating no adjustments have yet been recorded for the year 2021.

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