Comprehensive The  Plant  Asset  and  Accumulated  Depreciation  accounts  of    Pell Corporation had the following balances at December 31,   2006:

 

Â	Plant Asset	Accumulated Depreciation
Land	$  350,000	$          —
Land improvements	180,000	45,000
Building	1,500,000	350,000
Machinery and equipment	1,158,000	405,000
Automobiles	150,000	112,000

Depreciation method and useful lives:

•     Land improvements: Straight-line; 15 years.

•     Building: 150%-declining-balance; 20 years.

•     Machinery and equipment: Straight-line; 10 years.

•     Automobiles: 150%-declining-balance; 3 years.

•     Depreciation is computed to the nearest month. No salvage values are recognized. Transactions during 2007:

1.      On January 2, 2007, machinery and equipment were purchased at a total invoice cost of $260,000, which included a

$5,500 charge for freight. Installation costs of $27,000 were incurred.

2.      On March 31, 2007, a machine purchased for $58,000 on January 3, 2003 was sold for $36,500.

3.      On May 1, 2007, expenditures of $50,000 were made to repave parking lots at Pell’s plant location. The work was neces- sitated by damage caused by severe winter weather.

4.      On November 2, 2007, Pell acquired a tract of land with an existing building in exchange for 10,000 shares of Pell’s $20 par common stock, which had a market price of $38 a share on this date. Pell paid legal fees and title insurance totaling

$23,000. The last property tax bill indicated assessed values of $240,000 for land and $60,000 for building. Shortly after acquisition, the building was razed at a cost of $35,000 in anticipation of new building construction in 2008.

5.      On December 31, 2007, Pell purchased a new automobile for $15,250 cash and trade-in of an automobile purchased for

$18,000 on January 1, 2006. The new automobile has a cash value of $19,000.

 

 

 

Required

1.      Prepare a schedule analyzing the changes in each of the plant assets during 2007, with detailed supporting computations. Disregard the related accumulated depreciation accounts.

2.      For each asset classification, prepare a schedule showing depreciation expense for the year ended December 31, 2007.

3.      Prepare a schedule showing the gain or loss from each asset disposal that Pell would recognize in its income statement for the year ended December 31, 2007.