Kohlbeck Corporation, a manufacturer of steel products, began operations on October 1, 2011. The accounting department of

Question:

Kohlbeck Corporation, a manufacturer of steel products, began operations on October 1, 2011. The accounting department of Kohlbeck has started the fixed-asset and depreciation schedule presented on page 647. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel.

1. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition.

2. Land A and Building A were acquired from a predecessor corporation. Kohlbeck paid $800,000 for the land and building together. At the time of acquisition, the land had an appraised value of $90,000, and the building had an appraised value of $810,000.

3. Land B was acquired on October 2, 2011, in exchange for 2,500 newly issued shares of Kohlbeck's common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $30 per share. During October 2011, Kohlbeck paid $16,000 to demolish an existing building on this land so it could construct a new building.

4. Construction of Building B on the newly acquired land began on October 1, 2012. By September 30, 2013, Kohlbeck had paid $320,000 of the estimated total construction costs of $450,000. It is estimated that the building will be completed and occupied by July 2014.

5. Certain equipment was donated to the corporation by a local university. An independent appraisal of the equipment when donated placed the fair value at $40,000 and the salvage value at $3,000.

6. Machinery A's total cost of $182,900 includes installation expense of $600 and normal repairs and maintenance of $14,900. salvage value is estimated at $6,000. Machinery A was sold on February 1, 2013.

7. On October 1, 2012, Machinery B was acquired with a down payment of $5,740 and the remaining payments to be made in 11 annual installments of $6,000 each beginning October 1, 2012. The prevailing interest rate was 8%. The following data were abstracted from present value tables (rounded).

InstructionsFor each numbered item on the schedule above, supply the correct amount. Round each answer to the nearestdollar.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...