I need answers to items a to e. they asked us to write it down in good accounting form.
14. You were engaged to audit the financial statements of Berry Corporation as of, and for the period ended December 31, 2017. The entity incurred all of the following transactions related to Property, Plant and Equipment during the first half of 2017: Transaction Cost Recorded as Purchase of land 10,540,000 Land Fees for registration and transfer of the title of land 80,000 Expense Demolition cost of old building 250,000 Expense Special assessment for public roadways and other government projects. 100,000 Land Improvements Construction permit fee 75,000 Expense Architect's fee 350,000 Building Excavation costs 500,000 Land Cost of constructing the building 35,000,000 Building Cost of temporary quarters Cost of constructing 140,000 ments and parking lot Land Improvements 950,000 Land Improvements Cost of constructing a permanent fence after the completion of the construction of the building. 480,000 Building Purchase price of machineries and equipment to be used in the normal operations of the entity. 2,500,000 Freight charges on the machineries and equipment 150,000 Machineries and Equipment Expense Insurance costs during the delivery of the machineries and equipment 100,000 Discount on early payment for the purchase of machineries Expense and equipment; the discount was not taken. 25,000 Installation costs of the machineries and equipment 95,000 ExpenseF ased from your audit procerbrres, you were able to ascertain the following: The pavements and parking lot are not part of the blueprint of the building. The discount on early payment for the purchase of machincries and equipment was ignored by the entity; the payable for such purchase, and the machineries and equipment were recorded at gross. The entity received proceeds totalling 45.000 and recorded the amount as income Further investigation revealed that the proceeds came from the initial testing of me equipment. The entity also temporarily operated the construction site as aparking space during the construction period. Proceeds totalling 280,000 were received, and the amount was treated by your client as a deduction from the cost of the building. The estimated usetl life of each of the accounts under PPE are as follows: Building -50 years; Machineries and equipment 20 years; Land Improvements 20 years. The building's residual value is 500,000. The entity started using all PPE items on Inlyl, 201?. The straightline method is used, and the company based its depreciation expense from the amounts capitalized as stated in the transactions above. The total depreciation expense recorded in 2017 was 442,?50. . What is the initial cost ofthe land? . What is the initial cost of the building? . What is the initial cost of the machineries and equipment? E. What is the carrying value ofproperty, plant and equipment as ofDecemher 31, 2017? le. How much is the overstatementf'undcrstatement on the 20]? net income of the entity
