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Information for Blake Corporation’s property, plant, and equipment for 2019 is: Transactions during 2019 and other information were as follows: a. On January 2, 2019, Blake purchased a new car for $10,000 cash and a trade-in of a 2-year-old car with a cost of $9,000 and a book value of $2,700. The new car has a cash price of $12,000; the market value of the trade-in is not known. b. On April 1, 2019, a machine purchased for $23,000 on April 1, 2014, was destroyed by fire. Blake recovered $15,500 from its insurance company. c. On May 1, 2019, costs of $168,000 were incurred to improve leased office premises. The leasehold improvements have a useful life of 8 years. The related lease, which terminates on December 31, 2025, is renewable for an additional 6-year term. The decision to renew will be made in 2025 based on office space needs at that time. d. On July 1, 2019, 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. Blake determined that the automotive equipment comprising the $115,000 balance at January 1, 2019, would have been depreciated at a total amount of $18,000 for the year ended December 31, 2019. Required: 1. For each asset classification, prepare schedules showing depredation and amortization expense, and accumulated depreciation and amortization that would appear on Blake’s income statement for the year ended December 31, 2019, and on the balance sheet at December 31, 2019, respectively. 2. Prepare a schedule showing the gain or loss from disposal of assets that would appear in Blake’s income statement for the year ended December 31,2019. 3. Prepare the property, plant, and equipment section of Blake’s December 31, 2019, balance sheet.

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

Solutions

Chapter
Section
Chapter 11, Problem 19P
Textbook Problem

Information for Blake Corporation’s property, plant, and equipment for 2019 is:

Chapter 11, Problem 19P, Information for Blake Corporations property, plant, and equipment for 2019 is: Transactions during

Transactions during 2019 and other information were as follows:

  1. a. On January 2, 2019, Blake purchased a new car for $10,000 cash and a trade-in of a 2-year-old car with a cost of $9,000 and a book value of $2,700. The new car has a cash price of $12,000; the market value of the trade-in is not known.
  2. b. On April 1, 2019, a machine purchased for $23,000 on April 1, 2014, was destroyed by fire. Blake recovered $15,500 from its insurance company.
  3. c. On May 1, 2019, costs of $168,000 were incurred to improve leased office premises. The leasehold improvements have a useful life of 8 years. The related lease, which terminates on December 31, 2025, is renewable for an additional 6-year term. The decision to renew will be made in 2025 based on office space needs at that time.
  4. d. On July 1, 2019, 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.
  5. e. Blake determined that the automotive equipment comprising the $115,000 balance at January 1, 2019, would have been depreciated at a total amount of $18,000 for the year ended December 31, 2019.

Required:

  1. 1. For each asset classification, prepare schedules showing depredation and amortization expense, and accumulated depreciation and amortization that would appear on Blake’s income statement for the year ended December 31, 2019, and on the balance sheet at December 31, 2019, respectively.
  2. 2. Prepare a schedule showing the gain or loss from disposal of assets that would appear in Blake’s income statement for the year ended December 31,2019.
  3. 3. Prepare the property, plant, and equipment section of Blake’s December 31, 2019, balance sheet.

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Chapter 11 Solutions

Intermediate Accounting: Reporting And Analysis
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