Culver Corporation, a manufacturer of steel products, began operations on October 1, 2019. Culvers accounting department has begun to prepare the capital asset and depreciation schedule that follows. You have been asked to assist in completing this schedule. In addition to determining that the data already on the schedule are correct, you have obtained the following information from the companys records and personnel:

1.		Depreciation is calculated from the first day of the month of acquisition to the first day of the month of disposition.
2.		Land A and Building A were acquired together for $690,000. At the time of acquisition, the land had an appraised value of $75,000 and the building had an appraised value of $675,000.
3.		Land B was acquired on October 2, 2019, in exchange for 5,000 newly issued common shares. At the date of acquisition, the shares had a fair value of $30 each. During October 2019, Culver paid $18,000 to demolish an existing building on this land so that it could construct a new building.
4.		Construction of Building B on the newly acquired land began on October 1, 2020. By September 30, 2021, Culver had paid $320,000 of the estimated total construction costs of $450,000. It is estimated that the building will be completed and occupied by July 2022.
5.		Certain equipment was donated to the corporation by a local university. An independent appraisal of the equipment when it was donated estimated its fair value at $40,000 and the residual value at $4,000.
6.		Machine As total cost of $154,200 includes an installation expense of $400 and normal repairs and maintenance of $14,200. Its residual value is estimated at $4,000. Machine A was sold on February 1, 2021.
7.		On October 1, 2020, Machine B was acquired with a down payment of $37,160 and the remaining payments to be made in 11 annual instalments of $4,000 each, beginning October 1, 2020. The prevailing interest rate was 8%. The following data were determined from present-value tables and are rounded:

PV of $1 at 8%				PV of an Ordinary Annuity of $1 at 8%
10 years		0.463		10 years		6.710
11 years		0.429		11 years		7.139
15 years		0.315		15 years		8.559

(a) For each numbered item in the schedule, give the correct amount. (Do not leave any answer field blank. Enter 0 for amounts.)

CULVER CORPORATION Capital Asset and Depreciation Schedule For Fiscal Years Ended September 30, 2020, and September 30, 2021

Depreciation Expense, Year Ended September 30

Assets

Acquisition Date

Cost

Residual Value

Depreciation Method

Estimated Life in Years

2020

2021

Land A

Oct. 1, 2019

(1) $

N/A

N/A

N/A

N/A

N/A

Building A

Oct. 1, 2019

(2)

$40,000

Straight-line

(3)

$14,525

(4)

Land B

Oct. 2, 2019

(5)

N/A

N/A

N/A

N/A

N/A

Building B

Under construction

$320,000 to date

Straight-line

30

(6)

Donated equipment

Oct. 2, 2019

(7)

4,000

150% declining-balance

10

(8)

(9)

Machine A

Oct. 2, 2019

(10)

4,000

Double-declining-balance

8

(11)

(12)

Machine B

Oct. 1, 2020

(13)

Straight-line

20

(14)

N/A = Not applicable

Attempts: 2 of 3 used

Submit Answer

Culver Corporation, a manufacturer of steel products, began operations on October 1, 2019. Culvers accounting department has begun to prepare the capital asset and depreciation schedule that follows. You have been asked to assist in completing this schedule. In addition to determining that the data already on the schedule are correct, you have obtained the following information from the companys records and personnel:

1.		Depreciation is calculated from the first day of the month of acquisition to the first day of the month of disposition.
2.		Land A and Building A were acquired together for $690,000. At the time of acquisition, the land had an appraised value of $75,000 and the building had an appraised value of $675,000.
3.		Land B was acquired on October 2, 2019, in exchange for 5,000 newly issued common shares. At the date of acquisition, the shares had a fair value of $30 each. During October 2019, Culver paid $18,000 to demolish an existing building on this land so that it could construct a new building.
4.		Construction of Building B on the newly acquired land began on October 1, 2020. By September 30, 2021, Culver had paid $320,000 of the estimated total construction costs of $450,000. It is estimated that the building will be completed and occupied by July 2022.
5.		Certain equipment was donated to the corporation by a local university. An independent appraisal of the equipment when it was donated estimated its fair value at $40,000 and the residual value at $4,000.
6.		Machine As total cost of $154,200 includes an installation expense of $400 and normal repairs and maintenance of $14,200. Its residual value is estimated at $4,000. Machine A was sold on February 1, 2021.
7.		On October 1, 2020, Machine B was acquired with a down payment of $37,160 and the remaining payments to be made in 11 annual instalments of $4,000 each, beginning October 1, 2020. The prevailing interest rate was 8%. The following data were determined from present-value tables and are rounded:

PV of $1 at 8%				PV of an Ordinary Annuity of $1 at 8%
10 years		0.463		10 years		6.710
11 years		0.429		11 years		7.139
15 years		0.315		15 years		8.559

(a) For each numbered item in the schedule, give the correct amount. (Do not leave any answer field blank. Enter 0 for amounts.)

CULVER CORPORATION Capital Asset and Depreciation Schedule For Fiscal Years Ended September 30, 2020, and September 30, 2021

Depreciation Expense, Year Ended September 30

Assets

Acquisition Date

Cost

Residual Value

Depreciation Method

Estimated Life in Years

2020

2021

Land A

Oct. 1, 2019

(1) $

N/A

N/A

N/A

N/A

N/A

Building A

Oct. 1, 2019

(2)

$40,000

Straight-line

(3)

$14,525

(4)

Land B

Oct. 2, 2019

(5)

N/A

N/A

N/A

N/A

N/A

Building B

Under construction

$320,000 to date

Straight-line

30

(6)

Donated equipment

Oct. 2, 2019

(7)

4,000

150% declining-balance

10

(8)

(9)

Machine A

Oct. 2, 2019

(10)

4,000

Double-declining-balance

8

(11)

(12)

Machine B

Oct. 1, 2020

(13)

Straight-line

20

(14)

N/A = Not applicable

eTextbook and Media