Information pertaining to Hedlund Corporation's property, plant, and equipment for 2011 follows. The salvage value s of

Question:

Information pertaining to Hedlund Corporation's property, plant, and equipment for 2011 follows.

The salvage values of the depreciable assets are immaterial. Depreciation is computed to the nearest month. Transactions during 2011 and other information are as follows:
(a) On January 2, 2011, Hedlund purchased a new car for $20,000 cash and tradein of a 2-year-old car with a cost of $18,000 and a book value of $5,400. The new car has a cash price of $24,000; the market value of the trade-in is not known.
(b) On April 1, 2011, a machine purchased for $23,000 on April 1, 2006, was destroyed by fire. Hedlund recovered $15,500 from its insurance company.
(c) On May 1, 2011, costs of $168,000 were incurred to improve leased office premises. The leasehold improvements have a useful life of eight years. The related lease terminates on December 31, 2017.
(d) On July 1, 2011, machinery and equipment were purchased at a total invoice cost of $280,000; additional costs of $5,000 for freight and $25,000 for installation were incurred.
(e) Hedlund determined that the automotive equipment comprising the $115,000 balance at January 1, 2011, would have been depreciated at a total amount of $18,000 for the year ended December 31, 2011.

Instructions:
1. Compute the total depreciation and amortization expense that would appear on Hedlund's income statement for the year ended December 31, 2011. Also compute the accumulated depreciation and amortization that would appear on the balance sheet at December 31, 2011.
2. Compute the total gain or loss from disposal of assets that would appear in Hedlund's income statement for the year ended December 31, 2011.
3. Prepare the Noncurrent Operating Assets section of Hedlund's December 31, 2011, balancesheet.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...