*** A10-26 Comprehensive Long-lived Asset Transactions and Depreciation: MH Plumbing Inc. (MH) is the largest plumbing contractor in Moncton, Alberta. Information on selected transactions/events is given below: 1. On 15 January 20X2, MH purchased land and a warehouse building for $455,000. The land was appraised at $175,000, while the building was appraised at $375,000. b. During January and February 20X2, MH spent $53,200 on the warehouse building, renovating it for its expected use as a storage and shipping facility c. MH used the warehouse building from February 20X2 until August 20x7. The building was expected to have a 20-year life and a residual value of $11,000. d. In late August 20X7, MH traded the warehouse and land for another facility on the other side of town. The second facility was slightly larger. MH paid $33,750 to the vendor, and $19,800 in legal fees as a result of the transaction. The new warehouse was appraised at $425,000, and the new land at $180,000. This warehouse facility was expected to have a useful life of 18 years and a residual value of $7.800. Page 646 e. MH used the new warehouse facility from August 20x7 until February 20X9. At that time, a fire destroyed the warehouse MH received $356,800 from the insurance company. f. MH called for tenders for construction of a new warehouse building in March 20X9, but the lowest bid was $788,000. The company decided to self-construct and began in May 20X9. Monies spent were as follows: Architect fees $ 80,000 Removing debris from building site 13.400 Material cost for construction 245,800 Labour cost for construction 199,600 Parking lot 45,200 Specific overhead assigned to construction 24,800 Interest on loans related to construction 34,100 MH received a $100,000 investment tax credit in 20x9 as a result of the building activities, which reduced 20x9 taxes payable. h. MH occupied its new warehouse in September 20X9. It was appraised at $650,000. It was expected to last for 25 years, and have a residual value of $20,000 Required: Prepare journal entries to record all transactions listed above, including annual depreciation to the end of 20X9. Record annual depreciation using a declining balance method of 10% for buildings, and 5% for parking lots. MH records a full year of depreciation in the year of acquisition and no amortization in the year of disposal. Justify any decisions made with respect to accounting policy or application *** A10-26 Comprehensive Long-lived Asset Transactions and Depreciation: MH Plumbing Inc. (MH) is the largest plumbing contractor in Moncton, Alberta. Information on selected transactions/events is given below: 1. On 15 January 20X2, MH purchased land and a warehouse building for $455,000. The land was appraised at $175,000, while the building was appraised at $375,000. b. During January and February 20X2, MH spent $53,200 on the warehouse building, renovating it for its expected use as a storage and shipping facility c. MH used the warehouse building from February 20X2 until August 20x7. The building was expected to have a 20-year life and a residual value of $11,000. d. In late August 20X7, MH traded the warehouse and land for another facility on the other side of town. The second facility was slightly larger. MH paid $33,750 to the vendor, and $19,800 in legal fees as a result of the transaction. The new warehouse was appraised at $425,000, and the new land at $180,000. This warehouse facility was expected to have a useful life of 18 years and a residual value of $7.800. Page 646 e. MH used the new warehouse facility from August 20x7 until February 20X9. At that time, a fire destroyed the warehouse MH received $356,800 from the insurance company. f. MH called for tenders for construction of a new warehouse building in March 20X9, but the lowest bid was $788,000. The company decided to self-construct and began in May 20X9. Monies spent were as follows: Architect fees $ 80,000 Removing debris from building site 13.400 Material cost for construction 245,800 Labour cost for construction 199,600 Parking lot 45,200 Specific overhead assigned to construction 24,800 Interest on loans related to construction 34,100 MH received a $100,000 investment tax credit in 20x9 as a result of the building activities, which reduced 20x9 taxes payable. h. MH occupied its new warehouse in September 20X9. It was appraised at $650,000. It was expected to last for 25 years, and have a residual value of $20,000 Required: Prepare journal entries to record all transactions listed above, including annual depreciation to the end of 20X9. Record annual depreciation using a declining balance method of 10% for buildings, and 5% for parking lots. MH records a full year of depreciation in the year of acquisition and no amortization in the year of disposal. Justify any decisions made with respect to accounting policy or application