Depreciation is computed to the nearest month and no

Assignment Help Accounting Basics

Reference no: EM13484958

The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2012:

	Plant Asset		Accumulated Depreciation
Land	$	335,000	$	0
Land improvements		175,500		42,000
Building		1,470,000		335,000
Machinery and equipment		1,128,000		390,000
Automobiles		147,000		110,500

	Transactions during 2013 were as follows:
a.	On January 2, 2013, machinery and equipment were purchased at a total invoice cost of $245,000, which included a $5,200 charge for freight. Installation costs of $24,000 were incurred.
b.	On March 31, 2013, a machine purchased for $55,000 in 2009 was sold for $35,000. Depreciation recorded through the date of sale totaled $23,375.
c.	On May 1, 2013, expenditures of $47,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather.
d.	On November 1, 2013, 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 $35 per share. Pell paid legal fees and title insurance totaling $21,500. Shortly after acquisition, the building was razed at a cost of $32,000 in anticipation of new building construction in 2014.
e.	On December 31, 2013, Pell purchased a new automobile for $14,500 cash and trade-in of an old automobile purchased for $16,500 in 2009. Depreciation on the old automobile recorded through December 31, 2013, totaled $12,375. The fair value of the old automobile was $3,600.

Required:

For each asset classification, prepare a schedule showing depreciation expense for the year ended December 31, 2013, using the following depreciation methods and useful lives:

Land improvements-Straight line; 15 years.

Building-150% declining balance; 20 years.

Machinery and equipment-Straight line; 10 years.

Automobiles-150% declining balance; 3 years.

Depreciation is computed to the nearest month and no residual values are used. (Do not round intermediate calculations.)

PELL CORPORATION

DEPRECIATION EXPENSE

For the Year Ended December 31, 2013

Land Improvements: XXXX

Building: XXXXXX

Machinery and Equipment: XXXX

Automobiles: XXXX

Total Depreciation Expense for 2013: XXXXX

Reference no: EM13484958

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