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Determining Cost of Land On-Time Delivery Company acquired an adiacent lot to construct a new warehouse, paying $30,000 in cash and giving a short-term nate for $289.000. Legal fees paid were $1,765, delinquent taxes assumed were $10,700, and fees paid to remove an old building from the land were $17,800. Materials salvaged from the demolition of the building were sold for $4,800. A contractor was paid $969,800 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet. Depreciation by Two Methods A Kubota tractor acquired on January 8 at a cost of $297,000 has an estimated useful life of 10 years. Assuming that it will have no residual value. a. Determine the depreciation for each of the first two years by the straight-line method. First Year Second Year b. Determine the depreciation for each of the first two years by the double-declining balance method. Do not round the double-declining balance rate. If required, round your final answers to the nearest dollar. First Year Second Year Partial-Year Depreciation Equipment acquired at a cost of $80,000 has an estimated residual value of $5,000 and an estimated useful life of 10 years. It was placed in service on April 1 of the current fiscal year, which ends on December 31. If necessary, round your answers to the nearest cent. a. Determine the depreciation for the current fiscal year and for the following fiscal year by the straight-line method. Depreciation Year 1 s Year 2 s b. Determine the depreciation for the current fiscal year and for the following fiscal year by the double-declining-balance method. Depreciation Year 1 Year 2 si Amortization Entries Kleen Company acquired patent rights on January 10 of Year 1 for $368,000. The patent has a useful life equal to its legal life of eight years. On January 7 of Year 4. Kleen successfully defended the patent in a lawsuit at a cost of $18,500. If required, round your answer to the nearest dollar. a. Determine the patent amortization expense for the Year 4 ended December 31 b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. If an amount box does not require an entry, leave it blank. Book Value of Fixed Assets Cannington Inc. designs, manufactures, and markets personal computers and related software. Cannington also manufactures and distributes music players (cPod), mobile phones (cPhone). and smartwatches (Cannington Watch) along with related accessories and services, including online distribution of third-party music, videos, and applications. The following information was taken from a recent annual report of Cannington: Property, plant, and Equipment (in millions): Current Year Preceding Year Land and buildings $485,470 $281,573 Machinery, equipment, and internal-use software 461,197 364,103 Other fixed assets 587,419 441,778 Accumulated depreciation and amortization (616,547) (514,598) a. Compute the book value of the fixed assets for the current year and the preceding year. Current year book value in millions) Sl Preceding year book value (in millions) s A comparison of the book values of the current and preceding years indicates that they . A comparison of the total cost and accumulated depreciation reveals that Cannington purchased million of additional fixed assets, which was offset by the additional depreciation expense of sl million taken during the current year. b. Would you normally expect Cannington's book value of fixed assets to increase or decrease during the year
