Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

P10-4(LO1,4,6)GROUPWORK(Dispositions, Including Condemnation, Demolition, and Trade-In)Presented below is a schedule of property dispositions for Hollerith Co. Schedule of Property Dispositions Cost Accumulated Depreciation Cash Proceeds

P10-4(LO1,4,6)GROUPWORK(Dispositions, Including Condemnation, Demolition, and Trade-In)Presented below is a schedule of property dispositions for Hollerith Co.

Schedule of Property Dispositions
Cost Accumulated Depreciation Cash Proceeds Fair Value Nature of Disposition
Land $40,000 $31,000 $31,000 Condemnation
Building 15,000 3,600 Demolition
Warehouse 70,000 $16,000 74,000 74,000 Destruction by fire
Machine 8,000 2,800 900 7,200 Trade-in
Furniture 10,000 7,850 3,100 Contribution
Automobile 9,000 3,460 2,960 2,960 Sale

The following additional information is available.

Land:On February 15, a condemnation award was received as consideration for unimproved land held primarily as an investment, and on March 31, another parcel of unimproved land to be held as an investment was purchased at a cost of $35,000.

Building:On April 2, land and building were purchased at a total cost of $75,000, of which 20% was allocated to the building on the corporate books. The real estate was acquired with the intention of demolishing the building, and this was accomplished during the month of November. Cash proceeds received in November represent the net proceeds from demolition of the building.

Warehouse:On June 30, the warehouse was destroyed by fire. The warehouse was purchased January 2, 2014, and had depreciated $16,000. On December 27, the insurance proceeds and other funds were used to purchase a replacement warehouse at a cost of $90,000.

Machine:On December 26, the machine was exchanged for another machine having a fair value of $6,300 and cash of $900 was received. (The exchange lacks commercial substance.)

Furniture:On August 15, furniture was contributed to a qualified charitable organization. No other contributions were made or pledged during the year.

Automobile:On November 3, the automobile was sold to Jared Winger, a stockholder.

Instructions

Indicate how these items would be reported on the income statement of Hollerith Co.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information For Business Decisions

Authors: Loren A Nikolai, Billie Cunningham, John D Bazley

3rd Edition

1111066884, 9781111066888

More Books

Students also viewed these Accounting questions

Question

Always have the dignity of the other or others as a backdrop.

Answered: 1 week ago