Bob, CEO of Bob inc. manufactures multiple products from house furniture to beach chairs and sells them in

multiple countries mainly in Bahamas to plan his exit from Canada$$s high tax rate

Given the fact that Bob owes a lot of money to the CRA, he had to find ways to increase production. He decided

to buy a building and equipment on January $1$st$,2024.$ He had to pay a total of $$500,000$ for both. An expert

evaluated the building and the equipment for $$330,000$ and $$220,000$ respectively. Following Bob$$s request, the

seller said that the book value for the building and equipment was $$392,000$ and $$265,000$ respectively. The seller

initially bought the building for $$400,000$ and the equipment for $$300,000.$

Also, Bob was debating between using the initial price paid by the seller or using the book value of the seller to

record its purchase.

Information below regarding the equipment

Building Equipment

Useful life $20$ years $10$ years

Residual value $$20,000$ $$8,000$

Other information:

Bob tells you that he had to pay total freight cost, for the equipment, of $$24,000$ on January $1$st$,$ for which he

decided to sell one of his wife$$s Chanel purses.

Here some transaction related to the building and equipment:

January $1,2024,$ Bob purchased a $1-$year insurance policy for the building and the equipment for $8,000$$ and

$3,000$$ respectively.

January $21$st

$,2024,$ Bob had to pay for multiple minor renovation before being able to use the building. Total cost

of $$20,000$

February $1,2024,$ Bob began using the building.

March $12$

th$,2024,$ the equipment required repairs before being used. The cost of which were $$2,600$ paid in cash.

April $1,2024,$ Bob began using the equipment.

April $15,2024,$ Bob tells you that he paid to make an adjustment on the equipment for an amount of $$3,000,$ for

which he paid immediately in cash, in the hope of including the cost in the asset value of the equipment.

December $31$st

$,2024$: Renovation of $$15,000$ of the equipment that increased production capacity by $10\%.$ Paid

immediately.

Required:

$1.$ Determine the cost to be capitalize for the building and equipment that will appear in the balance sheet on

April $30$th $($show calculation$)$

$2.$ Record all necessary transactions for the year $2024($ignore adjusting entry for insurance$),$ including, the

date, the proper account name, the amount and the effect on the accounting equation: A $=$ L $+$ SE

$3.$ Prepare a non$-$current asset section of the balance sheet as at December $31$st$,2024$