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.)