HW 1 Bevo T-shirt Company purchased land, paying $30,000 cash plus a $300,000 note payable. In addition, Bevo paid delinquent property tax of $2,000 and paid $14,000 to remove an unwanted building on the property. Bevo then constructed an office building at a cost of $900,000. Bevo also paid $15,000 for legal work on the land. $40,000 was spent on paving for a parking lot and $10,000 was paid for lighting. High- tech sewing machines costing $80,000 were then installed and setup at a cost of $5,000. Transportation cost on the machines was $700. $400 was spent on building permits. Requirements: 1. What are the cost of the land, land improvements, building and equipment. 2. Which of these assets will Bevo depreciate? Solution L Cost of land $ 1. Cost of land improvements S Cost of building $ 2.5 Cost of the machinery S 2. Building, land improvements and? R.M. Check number information: land cost is $311,000 more than land improvements. The building cost is $814,700 more than the equipment cost. HW 2 Northwest Street Paving Company purchased paving equipment on January 2, 2015, for $380,000. The equipment was expected to have a useful life of four years, or 8,000 operating (paving) hours, and a residual value of $36,000. The equipment was used for 2,000 hours during 2015, 3,500 hours in 2016, 1,400 hours in 2017, and 1,100 hours in 2018. Requirements: 1. Prepare a schedule of depreciation expense, accumulated depreciation and book value for the paving equipment under the three methods (straight-line, units-of-production and double- declining balance.