The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2020:AccumulatedDepreciation0LandLand improvementsBuildingEquipmentAutomobilesPlant Asset$ 395,000193,5001,590,0001,248,000159,000Transactions during 2021 were as follows:$54,000395,000450,000116,500a. On January 2, 2021, equipment were purchased at a total invoice cost of $305,000, which included a $6,400 charge for freight.Installation costs of $36,000 were incurred.b. On March 31, 2021, a small storage building was donated to the company. The person donating the building originally purchased itthree years ago for $34,000. The fair value of the building on the day of the donation was $21,400.c. On May 1, 2021, expenditures of $59,000 were made to repave parking lots at Pell's plant location. The work was necessitated bydamage 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 stockthat had a market price of $47 per share. Pell paid legal fees and title insurance totaling $27,500. Shortly after acquisition, thebuilding was razed at a cost of $44,000 in anticipation of new building construction in 2022.e. On December 31, 2021, Pell purchased a small storage building by giving $17,500 cash and an old automobile purchased for$22,500 in 2014. Depreciation on the old automobile recorded through December 31, 2021, totaled $16,875. The fair value of theold automobile was $4,200. Required:For each asset classification, prepare a schedule showing depreciation for the year ended December 31, 2021, using the followingdepreciation 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;$0.50 per mileDepreciation is computed to the nearest month and no residual values are used. Automobiles were driven 42,500 miles in 2021. (Donot round intermediate calculations and round your final answers to 2 decimal places.)X Answer is complete but not entirely correct.PELL CORPORATIONDepreciationFor the Year Ended December 31, 2021$Land ImprovementsBuildingEquipmentAutomobilesTotal depreciation for 202112,900.00✔1,633,100.00 x158,900.00136,500.00$ 1,941,400.00

calculation of depreciation are as follows

The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2020: Accumulated Depreciation 0 54,000 395,000 450,000 116,500 Land Land improvements Building Equipment Automobiles Plant Asset $ 395,000 193,500 1,590,000 1,248,000 159,000 Transactions during 2021 were as follows: $ a. On January 2, 2021, equipment were purchased at a total invoice cost of $305,000, which included a $6,400 charge for freight. Installation costs of $36,000 were incurred. b. On March 31, 2021, a small storage building was donated to the company. The person donating the building originally purchased three years ago for $34,000. The fair value of the building on the day of the donation was $21,400. c. On May 1, 2021, expenditures of $59,000 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

The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2020: Accumulated Depreciation 0 54,000 395,000 450,000 116,500 Land Land improvements Building Equipment Automobiles Plant Asset $ 395,000 193,500 1,590,000 1,248,000 159,000 Transactions during 2021 were as follows: $ a. On January 2, 2021, equipment were purchased at a total invoice cost of $305,000, which included a $6,400 charge for freight. Installation costs of $36,000 were incurred. b. On March 31, 2021, a small storage building was donated to the company. The person donating the building originally purchased three years ago for $34,000. The fair value of the building on the day of the donation was $21,400. c. On May 1, 2021, expenditures of $59,000 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2020:
Accumulated
Depreciation
0
Land
Land improvements
Building
Equipment
Automobiles
Plant Asset
$ 395,000
193,500
1,590,000
1,248,000
159,000
Transactions during 2021 were as follows:
$
54,000
395,000
450,000
116,500
a. On January 2, 2021, equipment were purchased at a total invoice cost of $305,000, which included a $6,400 charge for freight.
Installation costs of $36,000 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 $34,000. The fair value of the building on the day of the donation was $21,400.
c. On May 1, 2021, expenditures of $59,000 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 $47 per share. Pell paid legal fees and title insurance totaling $27,500. Shortly after acquisition, the
building was razed at a cost of $44,000 in anticipation of new building construction in 2022.
e. On December 31, 2021, Pell purchased a small storage building by giving $17,500 cash and an old automobile purchased for
$22,500 in 2014. Depreciation on the old automobile recorded through December 31, 2021, totaled $16,875. The fair value of the
old automobile was $4,200.

Required:
For each asset classification, prepare a schedule showing depreciation for the year ended December 31, 2021, 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 42,500 miles in 2021. (Do
not round intermediate calculations and round your final answers to 2 decimal places.)
X Answer is complete but not entirely correct.
PELL CORPORATION
Depreciation
For the Year Ended December 31, 2021
$
Land Improvements
Building
Equipment
Automobiles
Total depreciation for 2021
12,900.00✔
1,633,100.00 x
158,900.00
136,500.00
$ 1,941,400.00

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