Presented in the table below are the balances in the individual property, plant and equipment accounts of Harvest Corporation as of December 31, 2020 Asset Cost Accumulated Depreciation Useful Life (Years) Salvage Value Depreciation Method Acquisition Date Land A $100,000 Building A 250,000 $100,000 25 $0 SL 01 01 11 Building B 380,000 100,000 15 $80,000 SL 01 01 16 Equipment A 120,000 58,560 10 10,000 150 DDB 01 01 18 Equipment B 45,000 9,000 10 3,000 DDB 01 01 20 Total $895,000 $267,560 INSTRUCTIONS Record the following transactions and adjusting entries for Harvest Corporation that took place during the year ended December 31, 2021 On January 2, 2021, Harvest exchanged Equipment A for Equipment C from Autumn Corporation The fair value of the acquired equipment is $75,000 In addition to giving up Equipment A , Harvest also paid $4,000 cash to Autumn The exchange has commercial substance Record the exchange On September 30, 2021, Harvest sold Equipment B for $30,000 cash Record depreciation expense on Equipment B from the beginning of the year through the date of the sale Record the sale On December 30, 2021, Harvest acquired Land B and Building C for a lump sum purchase price of $800,000 cash The fair value of the land and building on the day of acquisition were $218,500 and $701,500, respectively Record the acquisition Record annual depreciation expense for Equipment C , which has as estimated salvage value of $5,000 and useful life of 10 years Use the 150 declining balance method Record annual depreciation expense for Building A for the year ending December 31, 2021 Harvest compared the pattern of usage of Building B with the assumptions used to calculate depreciation for Building B After careful analysis, management estimated that the remaining useful life of the building as of January 1, 2021 was 15 years (5 more than originally expected), but the estimated salvage value was reduced to $40,000 The changes will be considered effective as of January 1, 2021 and should be used to calculate 2021 depreciation expense Record annual depreciation expense for Building B for the year ending December 31, 2021

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 11, 2024

Presented in the table below are the balances in the individual property, plant and equipment accounts of Harvest Corporation as of December 31, 2020. Asset

Presented in the table below are the balances in the individual property, plant and equipment accounts of Harvest Corporation as of December 31, 2020.

Asset	Cost	Accumulated Depreciation	Useful Life (Years)	Salvage Value	Depreciation Method	Acquisition Date
Land A	$100,000
Building A	250,000	$100,000	25	$0	SL	01/01/11
Building B	380,000	100,000	15	$80,000	SL	01/01/16
Equipment A	120,000	58,560	10	10,000	150% DDB	01/01/18
Equipment B	45,000	9,000	10	3,000	DDB	01/01/20
Total	$895,000	$267,560

INSTRUCTIONS

Record the following transactions and adjusting entries for Harvest Corporation that took place during the year ended December 31, 2021.

On January 2, 2021, Harvest exchanged Equipment A for Equipment C from Autumn Corporation. The fair value of the acquired equipment is $75,000. In addition to giving up Equipment A, Harvest also paid $4,000 cash to Autumn. The exchange has commercial substance. Record the exchange.
On September 30, 2021, Harvest sold Equipment B for $30,000 cash.
1. Record depreciation expense on Equipment B from the beginning of the year through the date of the sale.
2. Record the sale.
On December 30, 2021, Harvest acquired Land B and Building C for a lump sum purchase price of $800,000 cash. The fair value of the land and building on the day of acquisition were $218,500 and $701,500, respectively. Record the acquisition.
Record annual depreciation expense for Equipment C, which has as estimated salvage value of $5,000 and useful life of 10 years. Use the 150% declining balance method.
Record annual depreciation expense for Building A for the year ending December 31, 2021.
Harvest compared the pattern of usage of Building B with the assumptions used to calculate depreciation for Building B. After careful analysis, management estimated that the remaining useful life of the building as of January 1, 2021 was 15 years (5 more than originally expected), but the estimated salvage value was reduced to $40,000. The changes will be considered effective as of January 1, 2021 and should be used to calculate 2021 depreciation expense. Record annual depreciation expense for Building B for the year ending December 31, 2021.