Question
1) Somerset Company acquired a piece of equipment with a list price of $200,000 for $182,000.Freight to Somerset's location was $7,000.Installation and testing costs were
1) Somerset Company acquired a piece of equipment with a list price of $200,000 for $182,000.Freight to Somerset's location was $7,000.Installation and testing costs were $7,500.An old piece of equipment was scrapped as a result of this new purchase.The old piece of equipment had an undepreciated value (net book value) of $8,000.The new piece of equipment is expected to have a 10 year life and a salvage value of $15,000.What is the total value assigned to the new piece of equipment?
2) February 1, 2018, Salisbury Company purchased land for the future factory location at a cost of $102,000.The dilapidated building that was on the property was demolished so that construction could begin on the new factory building. The new factory was completed on November 1, 2018. Costs incurred during this period were:
Item
Amount
Demolition dilapidated building
$3,000
Architect Fees
$11,250
Legal Fees - for title search
$1,500
Interest During Active Construction Period
$5,025
Real estate transfer tax
$825
Construction Costs
$605,000
Using this information, how much should be recorded as the cost of the land?
3) On January 2, 2019, Adelphi Company purchased a patent for $160,000 plus $5,000 in legal fees. On that date, the patent had a remaining legal life of 13 years. Adelphi Company expects to use the patent for 9 years after which time it will be worthless.How much is the annual amortization expense for 2019?Round to nearest whole dollar.
4) Annapolis Company was recently sold for $460,000.Annapolis had assets & liabilities appraised at the time of the sale in the amounts of:
Item
Amount
Accounts Receivable assumed by buyer
$123,000
Inventory
$290,000
Property, Plant & Equipment (net)
$515,000
Notes Payable assumed by buyer
$665,000
Using this information, how much should be recorded as Goodwill for this transaction?
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