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Exercise #2: On March 1, 2022, Westmorlan Company acquired real estate on which it planned to construct a small office building. The company paid $75,000
Exercise #2: On March 1, 2022, Westmorlan Company acquired real estate on which it planned to construct a small office building. The company paid $75,000 in cash. An old warehouse on the property was razed at a cost of $8,600; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,100 attorney's fee for work concerning the land purchase, $5,000 real estate broker's fee, $7,800 architect's fee, and $14,000 to put in driveways and a parking lot. Instructions (a) Determine the amount to be reported as the cost of the land. (b) For each cost not used in part (a), indicate the account to be debited. Exercise #3: Linton Company purchased a delivery truck for $34,000 on January 1, 2022. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2022 and 12,000 in 2023. Instructions (a) Compute depreciation expense for 2022 and 2023 using (1) the straight-line method, (2) the units-ofactivity method, and (3) the double-declining-balance method. (b) Assume that Linton uses the straight-line method. (1) Prepare the journal entry to record 2020 depreciation. (2) Show how the truck would be reported in the December 31,2022 , balance sheet
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