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Acquisition of An Asset: Moss Piano Company purchases a tract of land and an existing building for $ 1 , 0 0 0 , 0

Acquisition of An Asset:
Moss Piano Company purchases a tract of land and an existing building for $1,000,000. The company plans to remove the old building and construct a new restaurant on the site. In addition to the purchase price, Moss pays closing costs, including title insurance of $3,000. The company also pays $14,000 in property taxes, which includes $9,000 of back taxes (unpaid taxes from previous years) paid by Moss on behalf of the seller and $5,000 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $50,000 to tear down the old building and remove it from the site. Moss is able to sell salvaged materials from the old building for $5,000 and pays an additional $11,000 to level the land.
Determine the cost of the land.
Depreciation and Disposal
The Moss Piano Company purchased a Delivery Truck on January 1,2025 for $50,000 which included all costs to get the asset ready for use. The truck has an anticipated life of 100,000 miles or 4 years. The estimated residual value at the end of the assets service life is expected to be $2,000. For assets of this type, the company utilizes the straight-line depreciation method.
A) Record the purchase of the asset.
\table[[A,L,SE,R,E,NI,CF,Account,DR,CR],[,,,,,,,,,]]
B) Complete the depreciation table below.
\table[[Period Ended,\table[[Depreciation],[Expense]],\table[[Accumulated],[Depreciation]],\table[[End of Period Book],[Value]]],[December 31,2025,,,],[December 31,2026,,,],[December 31,2027,,,],[December 31,2028,,,]]
C) Record the entry for December 31,2025 to record the depreciation for the year.
\table[[A,L,SE,R,E,NI,CF,Account,,,],[,,,,,,,,,,]]
D) Suppose the company sells the van on December 31,2027 for $18,000 cash. Provide the journal entry to record the sale.
\table[[A,L,SE,R,E,NI,CF,Account,,],[,,,,,,,,,]]
E) Assume the company chooses to use the units-of-production method. Based on the information below, complete the depreciation schedule.
\table[[Year,Miles Driven],[2025,27.000],[2026,24.000],[2027,32.000],[2028,22.000]]
\table[[Period Ended,\table[[Depreciation],[Expense]],\table[[Accumulated],[Depreciation]],\table[[End of Period Book],[Value]]],[December 31,2025,,,],[December 31,2026,,,],[December 31,2027,,,],[December 31,2028,,,]]
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