lp LI ILIVIPIW&OU=528914 Normal Calibri 11 B 7 U A. A [Part 3): Unfortunately, near the end of the year, Foot Fault had to terminate the employment of John Smith, its coordinator for Property Plant and Equipment (PP&E) tracking. Smith had made several mistakes in tracking the PP&E Continuity Schedule for Foot Fault's Fixed Asset and Accumulated Depreciation Schedule. From the depreciation calculated in the above document, a certain amount is allocated to inventory because of the use of the Fixed Assets in the production of goods (tennis shirts, etc.). Smith had based his creation and maintenance of the PP&E Continuity Schedule on these facts: Foot Fault uses Straight Line Depreciation for all PP&E Assets. Foot Fault's Land was purchased November 1, 2010 for $3,000,000. Smith had a casual conversation with some of Foot Fault's loading dock employees who said "this piece of land is in a good location; it will be good for something like 100 years". Smith decided to use this statement in his calculations of the PP&E Continuity Schedule. All equipment currently used by Foot Fault was originally purchased on November 1, 2018. Acquisition costs were $1,900.000 and all other costs combined used to bring the equipment to its intended use were $100,000. The equipment has an estimated useful life of 10 years and no salvage value. On November 1, 2019, Foot Fault moved into a new building which included all production, distribution and administrative functions (ie. all functions). Foot Fault paid $5,000,000 for the building's construction and to bring it to its intended use. The building has an estimated useful life of 50 years and no salvage value. Foot Fault recently purchased a truck, an asset they had never before owned. This eliminated most of the expense of paying shipping companies to move finished good to customers. The truck was purchased on May 1, 2020. Foot Fault paid $105,000 for the truck and to bring it to its intended use. The truck has an estimated useful life of 5 years and a $5,000 salvage value. Michele asked to see the PP&E Continuity Schedule as part of her substantive testing and the below was provided nal Calibri 11 BIU A. A As at October 31, 2020 PROPERTY, PLANT AND EQUIPMENT CONTINUITY SCHEDULE (FOR ASSSET AND DEPRECIATION) Asset Cost in $'000 Accumulated Depreciation in S'o0o Beginning Ending Beginning Ending Balance Added Sold Balance Balance Added Sold Balance 3,000 3,000 270 30 300 1,900 1,900 190 190 380 0 5,000 100 100 200 Land Equipment Building 5,000 Truck 0 105 105 0 20 20 4,900 5,105 TOTAL 0 10,005 560 340 O 900 Notes: Land: Entered intended use November 1, 2010; Depreciated over 100 years Annual Straight Line Depreciation: $3,000,000 / 100 years = $30,000 Equipment: Entered intended use November 1, 2018; Depreciated over 10 years and no salvage value Annual Straight Line Depreciation: $1,900,000/10 years = $190,000 Building: Entered intended use November 2019; Depreciated over 50 years and no salvage value Annual Straight Line Depreciation: $5,000,000 / 50 years = $100,000 Truck: Entered intended use May 1, 2020; Depreciated over 5 years and $5,000 salvage value Annual Straight Line Depreciation: ($105,000 - $5,000)/5 years = $20,000 Required: nal Calibri 11 - A A Beginning Balance Added Beginning Balance Sold Ending Balance Added Sold Land Ending Balance 3,000 1,900 5,000 270 3,000 1,900 30 300 190 190 380 Equipment Building Truck 0 100 100 200 5,000 105 0 105 0 20 20 TOTAL 4,900 5,105 0 10,005 560 340 0 900 Notes: Land: Entered intended use November 1, 2010; Depreciated over 100 years Annual Straight Line Depreciation: $3,000,000 / 100 years = $30,000 Equipment: Entered intended use November 1, 2018; Depreciated over 10 years and no salvage value Annual Straight Line Depreciation: $1,900,000 / 10 years = $190,000 Building: Entered intended use November 1, 2019; Depreciated over 50 years and no salvage value Annual Straight Line Depreciation: $5,000,000 / 50 years = = $100,000 Truck: Entered intended use May 1, 2020; Depreciated over 5 years and $5,000 salvage value Annual Straight Line Depreciation: ($105,000 - $5,000/5 years = $20,000 Required: From the above PP&E Continuity Schedule, identify four errors. No need for journal entries; simply identify errors. explain why each is an error and state the correct amounts