1. Prepare a schedule analyzing the changes in each of the plant assets during 2016.

2. Prepare a schedule showing the gain or loss from each asset disposal that would be recognized in Pell’s income statement for the year ended December 31, 2016.

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The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2015: Accumulated Plant Asset $ 470,000 240,000 2,100,000 Machinery and equipment 1,182,000 210,000 Depreciation Land Land improvements Building 57,000 362,000 417,000 124,000 Automobiles Transactions during 2016 were as follows: a. On January 2, 2016, machinery and equipment were purchased at a total invoice cost of $320,000, which included a $6,700 charge for freight. Installation costs of $39,000 were incurred. b. On March 31, 2016, a machine purchased for $70,000 in 2012 was sold for $48,500. Depreciation recorded through the date of sale totaled $26,450. c. On May 1, 2016, expenditures of $62,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather. d. On November 1, 2016, 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 $40 per share. Pell paid legal fees and title insurance totaling $35,000. Shortly after acquisition, the building was razed at a cost of $47,000 in anticipation of new building construction in 2017. e. On December 31, 2016, Pell purchased a new automobile for $16,450 cash and trade-in of an old automobile purchased for $24,000 in 2012. Depreciation on the old automobile recorded through December 31, 2016, totaled $14,700. The fair value of the old automobile was $4,950. The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2015: Accumulated Plant Asset $ 470,000 240,000 2,100,000 Machinery and equipment 1,182,000 210,000 Depreciation Land Land improvements Building 57,000 362,000 417,000 124,000 Automobiles Transactions during 2016 were as follows: a. On January 2, 2016, machinery and equipment were purchased at a total invoice cost of $320,000, which included a $6,700 charge for freight. Installation costs of $39,000 were incurred. b. On March 31, 2016, a machine purchased for $70,000 in 2012 was sold for $48,500. Depreciation recorded through the date of sale totaled $26,450. c. On May 1, 2016, expenditures of $62,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather. d. On November 1, 2016, 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 $40 per share. Pell paid legal fees and title insurance totaling $35,000. Shortly after acquisition, the building was razed at a cost of $47,000 in anticipation of new building construction in 2017. e. On December 31, 2016, Pell purchased a new automobile for $16,450 cash and trade-in of an old automobile purchased for $24,000 in 2012. Depreciation on the old automobile recorded through December 31, 2016, totaled $14,700. The fair value of the old automobile was $4,950.

Answer rating: 100% (QA)

Analysis of change in plant assets for the year ended December 312016 Particulars Balance as on Dec ... View the full answer