The plant asset and accumulated depreciation accounts of Jackson Corporation had the following balances at December 31, 2015:
Plant Asset Accumulated Depreciation
Land $ 375,000 $ 0
Land improvements 187,500 50,000
Building 1,550,000 375,000
Machinery and equipment 1,208,000 430,000
Automobiles 155,000 114,500
Transactions during 2016 were as follows:
a. On January 2, 2016, machinery and equipment were purchased at a total invoice cost of $285,000, which included a $6,000 charge for freight. Installation costs of $32,000 were incurred.
b. On March 31, 2016, a machine purchased for $63,000 in 2012 was sold for $39,000. Depreciation recorded through the date of sale totaled $26,775.
c. On May 1, 2016, expenditures of $55,000 were made to repave parking lots at Jackson's plant location. The work was necessitated by damage caused by severe winter weather.
d. On November 1, 2016, Jackson acquired a tract of land with an existing building in exchange for 10,000 shares of Jackson's common stock that had a market price of $43 per share. Jackson paid legal fees and title insurance totaling $25,500. Shortly after acquisition, the building was razed at a cost of $40,000 in anticipation of new building construction in 2017.
e. On December 31, 2016, Jackson purchased a new automobile for $16,500 cash and trade-in of an old automobile purchased for $20,500 in 2012. Depreciation on the old automobile recorded through December 31, 2016, totaled $15,375. The fair value of the old automobile was $4,000.
Required: For each asset classification, create a schedule showing depreciation for the year ended December 31, 2016, 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.
Jackson Corporation
Depreciation Expense
For the year Ended December 31, 2016
Land Improvements:
Building:
Machinery and Equipment:
Automobiles:
Total depreciation expense for 2016: