Student Name:
Class:
Balance Balance
12/31/2015 Increase Decrease 12/31/2016
Land (1) 175,000$ 312,500$ –$ 487,500$
Land improvements – 192,000 – 192,000
(1) Plant facility acquired from King 1/6/2016 – allocation to Land and Building:
Shares 25,000
Allocation in proportion to appraised values at date of exchange:
Amount % of Total Allocation
Land 187,500$ 25% 312,500$ «- Correct!
Instructor
Problem 11-02
Explanation of Amounts:
For the Year Ending December 31, 2016
Analysis of Changes in Plant Assets
CORD COMPANY
Requirement 1:
McGraw-Hill/Irwin
Student Name:
Class:
Instructor
Problem 11-02
McGraw-Hill/Irwin
Building acquired 1/6/2016
Total amount subject to depreciation
150% declining balance rate
Automobile purchased, 8/30/2016
Depreciation for 2016
Truck sold on 9/30/2016 – depreciation
Depreciation on automobiles and trucks
150% declining balance rate
Automobiles and trucks:
Depreciation on machinery and equipment for 2016
Amount subject to depreciation
Purchased on 7/1/2016
Depreciation for one-half year
Book value, 1/1/2016
Deduct 1/1/2016 book value of truck sold on 9/30
Amortization period, years
Amortization of leasehold improvements for 2016
Correct!
1,171,100$
Correct!
1,125,000$
10% 112,500
Correct!
108,000$
Book value, 1/1/2016
Leasehold improvements:
Book value, 1/1/2016
Machinery and equipment:
Balance, 1/1/2016
Straight-line rate
For the Year Ended December 31, 2016
Depreciation and Amortization Expense
CORD COMPANY
Requirement 2:
Land Improvements:
Buildings:
Cost
Straight-line rate
Annual depreciation
Depreciation on land improvements for 2016
Accumulated
Plant Depreciation &
Asset Amortization
175,000$ $ –
1,500,000 328,900
Useful Life Depreciation
(years) Method
Machinery and equipment
Automobiles and trucks (all acquired after 2012)
Leasehold improvements
Land improvements
Assessed value of land
Assessed value of building
Parking lots, streets and sidewalk costs
Useful life of expenditures
Leasehold improvements useful life
Machinery and equipment purchase
Delivery costs
Installation costs
Machine – carrying amount
New auto purchase
Truck – cost
Truck – carrying amount
Truck sale
Truck depreciation for 9 months
Machine – cost
25 150% Declining balance
25,000
50$
CORD COMPANY
Given Data P11-02:
Transactions and other information:
Category
Land
Buildings
Buildings
Common shares exchanged for land and building
Common share fair value
Machinery and equipment
Automobiles and trucks
Leasehold improvements
Land improvements
Student Name:
Class:
150% declining balance rate
Straight-line rate
Purchased 1/2/2016
Depreciation
Machine sold 3/31/2016
Depreciation for three months
Total depreciation on machinery and equipment
Automobiles:
180,000$
6.67% 12,000$
Correct!
Correct!
1,158,000$
(58,000) 1,100,000$
Deduct machine sold
Balance, 12/31/2015
Machinery and Equipment:
Building:
Land Improvements
Cost
Straight-line rate
Instructor
For the Year Ended December 31, 2016
Depreciation Expense
PELL CORPORATION
Problem 11-03
McGraw-Hill/Irwin
Book value 12/31/2015
150% declining balance rate
Plant Accumulated
Assets Depreciation
Machine selling price, 2016
Depreciation through date of sale
Repaving cost
Common shares exchanged for land
Market price per share
Legal fees and title insurance
Cost to raze building
New automobile cost
Old automobile cost
Old automobile depreciation
Old automobile fair value
Machine purchase, 2012
Installation costs
350,000$ $ –
180,000 45,000
260,000$
5,500$
Useful Life Depreciation
(years) Method
Machinery and equipment
15 Straight-line
Land improvements
Balances at December 31, 2015:
Given Data P11-03:
PELL CORPORATION
Transactions during 2016:
Plant asset and accumulated depreciation accounts
Land
Land improvements
Machinery and equipment purchase
Freight charge (included in purchase price above)
Machinery and equipment
Student Name:
Class:
Cost at 3/31/16
Estimated life
Residual Value
Sum-of-the-years’-digits rate
Sum-of-the-digits
Equipment:
Residual Value
Straight-line rate
$500,000
240,000$
8
Account Debit Credit
5,625
Residual Value
Straight-line rate
Cost at 3/31/16
Estimated life
5,625
80,000
Straight-line rate
2016 Depreciation:
Loss on sale of machinery
Accumulated depreciation-machinery
Cost at 3/31/16
Estimated life
Residual Value
2. 6/29/2017
Cash
Cost at 3/31/16
General Journal
Accumulated depreciation-machinery
Depreciation Expense
1. 6/29/2017
Machinery sold 6/29/2017:
Instructor
Requirement 2:
Problem 11-06
McGraw-Hill/Irwin
Requirement 1:
Building:
Machinery:
Estimated life
Cost at 3/31/16
Estimated life
Straight-line rate
Correct!
$100,000
Cost at 3/31/16
2017 Depreciation:
Estimated life
Residual Value
Straight-line rate
Residual Value
Sum-of-the-digits
Estimated life
Equipment:
Residual Value
Straight-line rate
Cost at 3/31/17
$140,000
8
Cost at 3/31/17
Machinery:
Estimated life
Requirement 3:
Building:
Cost at 3/31/17
Estimated life
Straight-line rate
Estimated Estimated Useful
Asset Cost Residual Value Life in Years
100,000$ N/A N/A
500,000 none 25
HERZOG COMPANY
Given Data P11-06:
Building
Land
Equipment
Machinery
Student Name:
Class:
1,600,000$
Depletion per ton
2016
Ore extracted (tons)
100,000$
400,000
Building cost
Depreciation:
Depreciation per ton
Revised depreciation rate
Revised depletion rate
Structures:
80,000
487,500
Revised depreciation rate
Depreciation per ton
80,000$
Instructor
Depletion and Depreciation
MARION COMPANY
Problem 11-07
McGraw-Hill/Irwin
Requirement 1:
Cost of mineral mine:
Depletion:
Land resale value
Estimated ore extracted (tons)
Purchase price
2017
Ore extracted (tons)
Revised ore extraction (tons)
Equipment:
Equipment cost
Development costs
Student Name:
Class:
Instructor
Problem 11-07
McGraw-Hill/Irwin
2,200,000$
Equipment:
2017 depreciation
Cost
Less accumulated depreciation:
2016 depreciation
2017 depreciation
18,750$
Requirement 2:
Mineral mine:
Book Value
MARION COMPANY
Cost
Less accumulated depletion:
Less accumulated depreciation:
2016 depreciation
Structures:
2016 depletion
2017 depletion
Cost
Land resale value
Building costs
Useful life of buildings
Estimated tons extracted
Additional mine development costs
1,600,000$
80,000$
4,000$
New equipments cost
Auction price of equipment
Given Data P11-07:
MARION COMPANY
Land purchase
Revised estimated tons extracted
2017 ore extracted
Ore sold from 2015 extraction
2016 ore extracted and sold