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 Balance 12/31/2010 Increase Decrease 12/31/2011 Land (1) $175,000 $312,500 $- $487,500 Land improvements - 192,000 - 192,000 Buildings (1) 1,500,000 937,500 - 2,437,500 Machinery and equipment (2) 1,125,000 385,000 17,000 1,493,000 Automobiles and trucks 172,000 12,500 24,000 160,500 Leasehold improvements 216,000 - - 216,000 $3,188,000 $1,839,500 $41,000 $4,986,500 Correct! 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 «- Correct! Building 562,500 75% 937,500 «- Correct! $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:
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This note was uploaded on 12/02/2010 for the course ACCT 211 taught by Professor Frech during the Spring '10 term at Benedictine IL.

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

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