A B D E F G H 1 f) In reviewing the records for a client, Golden Grain Company, Amy noted the following items in the company's capital assets. Golden Grain Company has adopted a partial-year depreciation policy, where depreciation is taken on a monthly basis. a 1 1. On March 31, 2020, Golden Grain spent $16,000,000 to purchase land that already comes with a building, which the company 2 will use as a warehouse. The land has a fair value of $12,000,000 and the building has a fair value of $8,000,000 on the date of 3 the purchase. The building has a residual value of $2,000,000 and is expected to bring future economic benefits to the company 4 evenly over its expected useful life of 20 years. Because land and building were acquired together as a bulk purchase and because 15 the building is attached to the land, the intern recorded the $16,000,000 purchase simply as a debit to building and credit to cash. 16 17 18 2. On July 1, 2020, the company purchased a patent at a cost of $500,000. The patent has a legal life of 20 years even though its 119 useful life is expected to be only 10 years. The intern recorded the purchase as a debit to patent and credit to cash for $500,000. 120 121 3. On November 30, 2020, the building incurred some water damage. The company spent $30,000 to repair the damage. The 122 intern capitalized this cost by debiting building and crediting cash for $30,000. 123 A B D E F G H I 1 3. On November 30, 2020, the building incurred some water damage. The company spent $30,000 to repair the damage. The 2 intern capitalized this cost by debiting building and crediting cash for $30,000. 3 4 For each of the above events, comment on whether the intern's treatment of the event correctly follows ASPE. If the intern was 25 wrong, suggest what she should have done. 26 27