Question

At December 31, 2020, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows

Category	Plant Asset				Accumulated Depreciation and Amortization
Land	$	185,000			$	—
Buildings		2,000,000				338,900
Equipment		1,625,000				327,500
Automobiles and trucks		182,000				110,325
Leasehold improvements		236,000				118,000
Land improvements		—				—

Depreciation methods and useful lives:
Buildings—150% declining balance; 25 years.
Equipment—Straight line; 10 years.
Automobiles and trucks—200% declining balance; 5 years, all acquired after 2017.
Leasehold improvements—Straight line.
Land improvements—Straight line.

Depreciation is computed to the nearest month and residual values are immaterial. Transactions during 2021 and other information:

1. On January 6, 2021, a plant facility consisting of land and building was acquired from King Corp. in exchange for 35,000 shares of Cord's common stock. On this date, Cord's stock had a fair value of $60 a share. Current assessed values of land and building for property tax purposes are $255,000 and $595,000, respectively.
2. On March 25, 2021, new parking lots, streets, and sidewalks at the acquired plant facility were completed at a total cost of $252,000. These expenditures had an estimated useful life of 12 years.
3. The leasehold improvements were completed on December 31, 2017, and had an estimated useful life of eight years. The related lease, which would terminate on December 31, 2023, was renewable for an additional four-year term. On April 30, 2021, Cord exercised the renewal option.
4. On July 1, 2021, equipment was purchased at a total invoice cost of $335,000. Additional costs of $11,000 for delivery and $60,000 for installation were incurred.
5. On September 30, 2021, Cord purchased a new automobile for $13,500.
6. On September 30, 2021, a truck with a cost of $25,000 and a book value of $11,000 on date of sale was sold for $12,500. Depreciation for the nine months ended September 30, 2021, was $2,475.
7. On December 20, 2021, equipment with a cost of $22,000 and a book value of $3,225 at date of disposition was scrapped without cash recovery

For each asset category, prepare a schedule showing depreciation or amortization expense for the year ended December 31, 2021. (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)

	CORD COMPANY Depreciation and Amortization Expense For the Year Ending December 31, 2021 Land Improvements $15,750 Buildings 187,866 Equipment 182,800 Automobiles and trucks Leasehold improvements 23,600 Total depreciation and amortization expense for 2021 $410,016

Answer 1

ANSWER

Amortization and Depreciation:
Land Improvement:
Value	$                            252,000
Life	12 Year
Depreciation for	9 Months
Depreciation	$252,000*1/12*9/12	$     15,750
Building:
25 Year Life,150% Decline	1.50*1/25	6%
Book Value, Jan 1 2018		$1,661,100
New Building-Pur in January		$1,470,000
Total	a	$3,131,100
Depreciation	a*6%	$   187,866
Machinery and Equipment:
10 Year SLM
		Value	Depreciation
For Full Year		$1,625,000	$     162,500
Addition Pur in Jul	Half Year Depreciation	$   406,000	$       20,300
Total		$2,031,000	$     182,800
Automobiles and Trucks:
55 Year Life,150% Decline	1.50*1/5	30%
Book Value, 1st Jan 2018	$182,000-$110,325	$     69,675
Less: Book value of Truck sold on 9/30		$    -11,000
Amount to be depreciated		$     58,675
150% Declining rate		30%	$ 17,602.50
Automobile Purchased on 8/30		$     13,500
150% Declining rate, for 4 Months		30%	$    1,350.00
Truck Sold on 9/30			$    2,475.00
			$ 21,427.50
Leashold:	($236,000-$118,000)/(8-3)	$     23,600
CORD COMPANY Depreciation and Amortization Expense For the Year Ending December 31, 2018
Land Improvements	$                          15,750
Buildings	$                        187,866
Machinery and equipment	$                        182,800
Automobiles and trucks	$                          21,428
Leasehold improvements	$                          23,600
Total depreciation and amortization expense for 2018	$                        431,444

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