In: Accounting
Selected accounts included in the property, plant, and equipment
section of Sheffield Corporation’s balance sheet at December 31,
2019, had the following balances.
Land | $432,000 | |
Land improvements | 201,600 | |
Buildings | 1,584,000 | |
Equipment | 1,382,400 |
During 2020, the following transactions occurred.
1. | A tract of land was acquired for $216,000 as a potential future building site. | |
2. | A plant facility consisting of land and building was acquired from Mendota Company in exchange for 28,800 shares of Sheffield’s common stock. On the acquisition date, Sheffield’s stock had a closing market price of $37 per share on a national stock exchange. The plant facility was carried on Mendota’s books at $158,400 for land and $460,800 for the building at the exchange date. Current appraised values for the land and building, respectively, are $331,200 and $993,600. | |
3. | Items of machinery and equipment were purchased at a total cost of $576,000. Additional costs were incurred as follows. |
Freight and unloading | $18,720 | |
Sales taxes | 28,800 | |
Installation | 37,440 |
4. | Expenditures totaling $136,800 were made for new parking lots, streets, and sidewalks at the corporation’s various plant locations. These expenditures had an estimated useful life of 15 years. | |
5. | A machine costing $115,200 on January 1, 2012, was scrapped on June 30, 2020. Double-declining-balance depreciation has been recorded on the basis of a 10-year life. | |
6. | A machine was sold for $28,800 on July 1, 2020. Original cost of the machine was $63,360 on January 1, 2017, and it was depreciated on the straight-line basis over an estimated useful life of 7 years and a salvage value of $2,880. |
(a)
Calculate the balance at December 31, 2020 in each of the following
balance sheet accounts. (Hint: Disregard the related
accumulated depreciation accounts.)
Balance at December 31, 2020
Land
Land Improvements
Buildings
Equipment