# Chap011 - Student Name Instructor Class McGraw-Hill/Irwin...

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Student Name: Instructor Class: McGraw-Hill/Irwin Problem 11-02 Requirement 1: CORD COMPANY Analysis of Changes in Plant Assets For the Year Ending December 31, 2011 Balance 12/31/2010 Increase Decrease Land (1) \$ 175,000 \$ 312,500 \$ - Land improvements - 192,000 - Buildings (1) 1,500,000 937,500 - Machinery and equipment (2) 1,125,000 385,000 17,000 Automobiles and trucks 172,000 12,500 24,000 Leasehold improvements 216,000 - ### \$ 3,188,000 \$ 1,839,500 \$ 41,000 Correct! Correct! Correct! Explanation of Amounts: (1) Plant facility acquired from King 1/6/2011 - allocation to Land and Building: Shares 25,000 Market price \$ 50 Fair value of shares \$ 1,250,000 Correct! Allocation in proportion to appraised values at date of exchange: Amount % of Total Allocation Land \$ 187,500 25% \$ 312,500 Building 562,500 75% 937,500 \$ 750,000 100% \$ 1,250,000 (2) Machinery and equipment purchased 7/1/2011: Invoice cost \$ 325,000 Delivery cost 10,000 Installation cost 50,000 Total acquisition cost \$ 385,000 «- Correct!

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Student Name: Instructor Class: McGraw-Hill/Irwin Problem 11-02 Requirement 2: CORD COMPANY Depreciation and Amortization Expense For the Year Ended December 31, 2011 Land Improvements: Cost \$ 192,000 Straight-line rate 8.33% Annual depreciation 16,000 Depreciation on land improvements for 2011 75% \$ 12,000 Correct! Buildings: Book value, 1/1/2011 \$ 1,171,100 Building acquired 1/6/2011 937,500 Total amount subject to depreciation 2,108,600 150% declining balance rate 6% \$ 126,516 Correct! Machinery and equipment: Balance, 1/1/2011 \$ 1,125,000 Straight-line rate 10% 112,500 Purchased on 7/1/2011 385,000 Depreciation for one-half year 5% 19,250 Depreciation on machinery and equipment for 2011 \$ 131,750 Correct! Automobiles and trucks: Book value, 1/1/2011 \$ 71,675 Deduct 1/1/2011 book value of truck sold on 9/30 (11,750) Amount subject to depreciation 59,925 150% declining balance rate 30% \$ 17,978 Automobile purchased, 8/30/2011 12,500 Depreciation for 2011 10% 1,250 Truck sold on 9/30/2011 - depreciation 2,650 Depreciation on automobiles and trucks \$ 21,878 Correct! Leasehold improvements: Book value, 1/1/2011 \$ 108,000 Amortization period, years 5 Amortization of leasehold improvements for 2011 21,600 Correct!
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