Depreciation is computed to the nearest month and no

Reference no: EM13569172

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

	Plant Asset		Accumulated Depreciation
Land	$	350,000	$	0
Land improvements		180,000		45,000
Building		1,500,000		350,000
Machinery and equipment		1,158,000		405,000
Automobiles		150,000		112,000

	Transactions during 2013 were as follows:
a.	On January 2, 2013, machinery and equipment were purchased at a total invoice cost of $260,000, which included a $5,500 charge for freight. Installation costs of $27,000 were incurred.
b.	On March 31, 2013, a machine purchased for $58,000 in 2009 was sold for $36,500. Depreciation recorded through the date of sale totaled $24,650.
c.	On May 1, 2013, expenditures of $50,000 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 $38 per share. Pell paid legal fees and title insurance totaling $23,000. Shortly after acquisition, the building was razed at a cost of $35,000 in anticipation of new building construction in 2014.
e.	On December 31, 2013, Pell purchased a new automobile for $15,250 cash and trade-in of an old automobile purchased for $18,000 in 2009. Depreciation on the old automobile recorded through December 31, 2013, totaled $13,500. The fair value of the old automobile was $3,750.

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.)

Reference no: EM13569172

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