The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2023 Plant Asset Accumulated Depreciation $365,000 184,500 1,530,000 1,188,000 153,000 Transactions during 2024 were as follows: a. On January 2, 2024, equipment were purchased at a total Invoice cost of $275,000, which included a $5,800 charge for freight Installation costs of $30,000 were incurred in addition to the Invoice cost b. On March 31, 2024, a small storage building was donated to the company. The person donating the building originally purchased t three years ago for $28,000. The fair value of the building on the day of the donation was $18,200. c. On May 1, 2024, expenditures of $53,000 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, 2024, 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 $41 per share. Pell paid legal fees and title Insurance totaling $24.500. Shortly after acquisition, the building was razed at a cost of $38,000 in anticipation of new building construction in 2025. e. On December 31, 2024, Pell purchased a small storage building by giving $16,000 cash and an old automobile purchased for $19.500 in 2017. Depreciation on the old automobile recorded through December 31, 2024, totaled $14.625. The fair value of the old automobile was $3,900. Land Land improvements Building Equipment Automobiles Land Improvements-Straight line; 15 years. Building-150% declining balance; 20 years. Required: For each asset classification, prepare a schedule showing depreciation for the year ended December 31, 2024, using the following depreciation methods and useful lives: Equipment Straight line: 10 years. Automobiles Units-of-production: $0.50 per mile PELL CORPORATION Depreciation For the Year Ended December 31, 2024 50 48,000 409,896 Depreciation is computed to the nearest month and no residual values are used. Automobiles were driven 39,500 miles in 2024. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Land Improvements 420,000 113,500 Building Equipment Automobiles Total deoreciation for 2024
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
sanjay
![The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2023
Plant Asset
$365,000
184,500
Accumulated Depreciation
50
48,000
1,530,000
409,896
1,188,000
420,000
153,000
113,500
Transactions during 2024 were as follows:
a. On January 2, 2024, equipment were purchased at a total invoice cost of $275,000, which included a $5,800 charge for freight.
Installation costs of $30,000 were incurred in addition to the Invoice cost.
b. On March 31, 2024, a small storage building was donated to the company. The person donating the building originally purchased
It three years ago for $28,000. The fair value of the building on the day of the donation was $18,200.
c. On May 1, 2024, expenditures of $53,000 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, 2024, 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 $41 per share. Pell paid legal fees and title Insurance totaling $24,500. Shortly after acquisition,
the building was razed at a cost of $38,000 in anticipation of new building construction in 2025.
e. On December 31, 2024, Pell purchased a small storage building by giving $16,000 cash and an old automobile purchased for
$19,500 in 2017. Depreciation on the old automobile recorded through December 31, 2024, totaled $14,625. The fair value of the
old automobile was $3,900.
Land
Land improvements
Building
Equipment
Automobiles
Required:
For each asset classification, prepare a schedule showing depreciation for the year ended December 31, 2024, using the following
depreciation methods and useful lives:
Land Improvements Straight line: 15 years.
Building-150% declining balance: 20 years.
Equipment Straight line: 10 years.
Automobiles Units-of-production: $0.50 per mile
Depreciation is computed to the nearest month and no residual values are used. Automobiles were driven 39,500 miles In 2024.
Note: Do not round intermediate calculations and round your final answers to 2 decimal places.
PELL CORPORATION
Depreciation
For the Year Ended December 31, 2024
Land Improvements
Building
Equipment
Automobiles
Total depreciation for 2024](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7467def2-e2ca-4117-b14d-311ebbe57e2d%2F389bbd7a-1b16-4901-8d1a-28d427579d54%2Fsfj8gg9_processed.jpeg&w=3840&q=75)
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