Chapter 11, Problem 5PA

Jada Company had the following transactions during the year:

• Purchased a machine for $500,000 using a long-term note to finance it

• Paid $500 for ordinary repair

• Purchased a patent for $45,000 cash

• Paid $200,000 cash for addition to an existing building

• Paid $60,000 for monthly salaries

• Paid $250 for routine maintenance on equipment

• Paid $10,000 for major repairs

• Depreciation expense recorded for the year is $25,000

If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jada’s balance sheet resulting from this year’s transactions? What amount did Jada report on the income statement for expenses for the year?