HOMEWORK Auditing

The following detail changes in the account: I. Land: The addition represents the purchase of land adjacent to the company's existing plant and is nanced as follows: Contract sales price2.0m shares of Mandirille Corporation Common Stock Liabilities assumed by Mandville Accrued county taxes at settlement date teem} Unpaid sewer installation assessment {b.4100} [in June 11'. the date on which the buyer and seller discussed the transaction. shares of Mandirille Corporation stock were selling for FISH. On June 311 the settlement date (day of the sale]. Mahdville stock. was selling for $T per share. The jounial entrf,r for the purchase was recorded as: Land $151.0DD Common Stock $ 201004} Paid-in capital in excess of par 120.000 Accrued taxes payable 4,5013 Accrued sewer assessment papa hle EACH] 2. [had impioiemcnrs: This account was increased by three journal entries {each recorded with a debit to land improvements and a credit to cash]I during the year. Each of these improvements relates to the new land that was purchased in point {I} above. Sidewalk to building $2,500 Repaving of road to building 3,500 Chain link fence (replaces rusted chain link fence surrounding property) 4,000 3. Building: The building was constructed by an independent contractor; the contract was for $473,000. Progress payments were made during construction through use of proceeds of a bank loan, for which the building serves as collateral. The interest during construction was capitalized ($22,000), while the interest subsequent to construction but prior to year-end ($20,000) was expensed.Auditing: Fixed Asset Section 4. Equipment: The change in the equipment was a trade of old book "update printing equipment" for two new computer servers and associated software that will maintain electronic updates. Until recently, updates of outdated portions of guidebooks were printed and "shrinkwrapped" with the guidebook. Now the updates will be available on Mandville's website. The old equipment had a cost of $60.000 and accumulated depreciation of $50,600 and was worth approximately its book value of $9,400. although the salesperson suggested that he was providing the company a $19,400 trade-in value. Accordingly, the following entry was made to record the exchange: Equipment-computer servers $110,000 Accumulated Depr. (old equipment) 50,600 Cash $90,600 Equipment-printing equipment 60,000 Gain on exchange of assets 10,000 5. Depreciation provisions: Mandville uses software to calculate depreciation to the exact day.