At December 31, 2017, Cord Company\'s plant asset and accumulated depreciation a

Question

At December 31, 2017, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows Accumulated Depreciation Category Land Buildings Machinery and equipment Automobiles and trucks Leasehold improvements Land improvements Plant Asset and Amortization $ 181,800 1,800,0oe 1,425,800 178,000 228,800 334,900 323,500 106, 325 114,000 Depreciation methods and useful lives: Buildings-150% declining balance: 25 years Machinery and equipment- Straight line; 10 years Automobiles and trucks-150% declining balance: 5 years, all acquired after 2014 Leasehold improvements-Straight line Land improvements-Straight line Depreciation is computed to the nearest month and residual values are immaterial. Transactions during 2018 and other information a. On January 6, 2018, a plant facility consisting of land and building was acquired from King Corp. in exchange for 31,000 shares of Cord's common stock. On this date, Cord's stock had a fair value of $50 a share. Current assessed values of land and building for property tax purposes are $202,500 and $607,500, respectively. b. On March 25, 2018, new parking lots, streets, and sidewalks at the acquired plant facility were completed at a total cost of

Explanation / Answer

CORD COMPANY Analysis of Changes in Plant Assets For the Year Ending December 31, 2018 Balance Balance 12/31/2017 Increase Decrease 12/31/2018 Land $181,000 $387,500 $568,500 Land Improvements 0 $228,000 $228,000 Buildings $1,800,000 $1,162,500 $2,962,500 Machinery and equipment $1,425,000 $397,000 $20,000 $1,802,000 Automobile and trucks $178,000 $13,100 $24,600 $166,500 Leasehold Improvements $228,000 $228,000 $3,812,000 $2,188,100 $44,600 $5,955,500 Plant facility acquired from King Corp 31000*50 1550000 This would be split between land and building Land $202,500 387500 Building $607,500 1162500 $810,000 Machinery and equipment Purchase Price $331,000 Delivery costs $10,000 Installation $56,000 $397,000 Requirement 2 CORD COMPANY Depreciation and Amortization Expense For the Year Ending December 31, 2018 Land Improvements Costs $228,000 Straight-Line rate (1/12) 0.08333333 Annual Depreciation $19,000 Depreciation for 2018 - 9months 3/4 $14,250 Buildings Book Value 1465100 (1800000-334900) Building Acquired 1162500 Total amount Subject to depreciation 2627600 150% declining balance rate (1/25 = 4%*1.5) 6% 157656 Machinery and Equipment Balance Beg $1,425,000 Straight line rate (1/10) 0.1 $142,500 Purchased, 01/07 $397,000 Depreciation for one-half year 5% $19,850 Depreciation on Machinery and equipment $162,350 Automobiles and trucks Book value 71675 (178000-106325) Less : Book value of truck sold $3,125 Amount Subj to Depreciation $68,550 150% declining balance rate (1/5 = 20%*1.5) 30% $20,565 Automobile purchased 13100 Depreciation for 2018, 4/12 0.1 1310 Truck Sold 2295 Depreciation on automobiles and trucks $24,170 Leasehold Improvements Book Value 114000 (228000-114000) Amortization period 10 Amortization for 2018 11400 Total depreciation and amortization expense for 2013 $369,826

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.