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The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December...

The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2017:

Plant Asset Accumulated
Depreciation
Land $ 520,000 $ —
Land improvements 265,000 62,000
Building 2,350,000 367,000
Machinery and equipment 1,192,000 422,000
Automobiles 235,000 129,000


Transactions during 2018 were as follows:

  1. On January 2, 2018, machinery and equipment were purchased at a total invoice cost of $345,000, which included a $7,200 charge for freight. Installation costs of $44,000 were incurred.
  2. On March 31, 2018, a small storage building was donated to the company. The person donating the building originally purchased it three years ago for $36,000. The fair value of the building on the day of the donation was $23,000.
  3. On May 1, 2018, expenditures of $67,000 were made to repave parking lots at Pell’s plant location. The work was necessitated by damage caused by severe winter weather.
  4. On November 1, 2018, 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 $39 per share. Pell paid legal fees and title insurance totaling $40,000. Shortly after acquisition, the building was razed at a cost of $52,000 in anticipation of new building construction in 2019.
  5. On December 31, 2018, Pell purchased a small storage building by giving $16,950 cash and an old automobile purchased for $26,500 in 2014. Depreciation on the old automobile recorded through December 31, 2018, totaled $15,200. The fair value of the old automobile was $5,450.

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1. Analyzing the changes in each of the plant asset:
a Machiner Cost:
Purchase Price $       345,000
Installation $         44,000
Total $       389,000
d Shares Vale exchanged ($39*10000) $       390,000
add: Legal Fee $         40,000
Add: Razing of Building $         52,000
$       482,000
Pell Corporation
Analysis of Changes in Plant Assets
For the Year Ending December 31, 2018
Balance Balance
12/31/17 Increase Decrease 12/31/18 Remarks
Land $                                                       520,000 $       482,000 $                 -   $   1,002,000 Working d
Land improvements $                                                       265,000 $                 -   $                 -   $       265,000
Buildings $                                                    2,350,000 $         23,000 $                 -   $   2,395,400 Fair Value of Donation
$         22,400 $16,950+$5,450
Machinery and equipment $                                                    1,192,000 $       389,000 $                 -   $   1,581,000 Working a
Automobiles $                                                       235,000 $         22,000 $       213,000
Total $                                                    4,562,000 $       916,400 $         22,000 $   5,456,400

ekkarill92 answered 3 months ago
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