Problem 11-10 Cullumber Corporation, a manufacturer of steel products, began operations on October 1, 2016. The accounting department of Cullumber has started the fixed-asset and depreciation schedule presented below. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel. 1. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. 2. Land A and Building A were acquired from a predecessor corporation. Cullumber paid $762,700 for the land and building together. At the time of acquisition, the land had an appraised value of $89,200, and the building had an appraised value of $802,800. 3. Land B was acquired on October 2, 2016, in exchange for 2,700 newly issued shares of Cullumber's common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $28 per share. During October 2016, Cullumber paid $16,100 to demolish an existing building on this land so it could construct a new building. 4. Construction of Building B on the newly acquired land began on October 1, 2017. By September 30, 2018, Cullumber had paid $340,000 of the estimated total construction costs of $494,500. It is estimated that the building will be completed and occupied by July 2019. 5. Certain equipment was donated to the corporation by a local university. An independent appraisal of the equipment when donated placed the fair value at $39,600 and the salvage value at $2,700. 6. Machinery A's total cost of $188,400 includes installation expense of $560 and normal repairs and maintenance of $16,000. Salvage value is estimated at $6,600. Machinery A was sold on February 1, 2018. 7. On October 1, 2017, Machinery B was acquired with a down payment of $5,550 and the remaining payments to be made in 11 annual installments of $5,810 each beginning October 1, 2017. The prevailing interest rate was 8%. The following data were abstracted from present value tables (rounded). Present value of an ordinary annuity of $1.00 at 8% Present value of $1.00 at 8% 10 years 0.463 11 years 0.429 15 years 0.315 10 years 11 years 15 years 6.710 7.139 8.559 Complete the schedule below. (Round answers to O decimal places, e.g. 45,892.) CULLUMBER CORPORATION Fixed-Asset and Depreciation Schedule For Fiscal Years Ended September 30, 2017, and September 30, 2018 Depreciation Expense Year Ended September 30 2017 Assets Acquisition Date Cost Salvage Depreciation Method Estimated Life in Years 2018 Land A N/A N/A N/A N/A N/A October 1, 2016 October 1, 2016 (1) $ (2) Building A $36,900 Straight-line $12,736 Land B October 2, 2016 1 (5) N/A N/A N/A N/A Building B Under Construction $340,000 to date - Straight-line 2,700 150% declining-balance Donated Equipment October 2, 2016 Machinery A October 2, 2016 Machinery B October 1, 2017 (7) (10) (13) 6,600 Sum-of-the-years'-digits Straight-line Problem 11-10 Cullumber Corporation, a manufacturer of steel products, began operations on October 1, 2016. The accounting department of Cullumber has started the fixed-asset and depreciation schedule presented below. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel. 1. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. 2. Land A and Building A were acquired from a predecessor corporation. Cullumber paid $762,700 for the land and building together. At the time of acquisition, the land had an appraised value of $89,200, and the building had an appraised value of $802,800. 3. Land B was acquired on October 2, 2016, in exchange for 2,700 newly issued shares of Cullumber's common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $28 per share. During October 2016, Cullumber paid $16,100 to demolish an existing building on this land so it could construct a new building. 4. Construction of Building B on the newly acquired land began on October 1, 2017. By September 30, 2018, Cullumber had paid $340,000 of the estimated total construction costs of $494,500. It is estimated that the building will be completed and occupied by July 2019. 5. Certain equipment was donated to the corporation by a local university. An independent appraisal of the equipment when donated placed the fair value at $39,600 and the salvage value at $2,700. 6. Machinery A's total cost of $188,400 includes installation expense of $560 and normal repairs and maintenance of $16,000. Salvage value is estimated at $6,600. Machinery A was sold on February 1, 2018. 7. On October 1, 2017, Machinery B was acquired with a down payment of $5,550 and the remaining payments to be made in 11 annual installments of $5,810 each beginning October 1, 2017. The prevailing interest rate was 8%. The following data were abstracted from present value tables (rounded). Present value of an ordinary annuity of $1.00 at 8% Present value of $1.00 at 8% 10 years 0.463 11 years 0.429 15 years 0.315 10 years 11 years 15 years 6.710 7.139 8.559 Complete the schedule below. (Round answers to O decimal places, e.g. 45,892.) CULLUMBER CORPORATION Fixed-Asset and Depreciation Schedule For Fiscal Years Ended September 30, 2017, and September 30, 2018 Depreciation Expense Year Ended September 30 2017 Assets Acquisition Date Cost Salvage Depreciation Method Estimated Life in Years 2018 Land A N/A N/A N/A N/A N/A October 1, 2016 October 1, 2016 (1) $ (2) Building A $36,900 Straight-line $12,736 Land B October 2, 2016 1 (5) N/A N/A N/A N/A Building B Under Construction $340,000 to date - Straight-line 2,700 150% declining-balance Donated Equipment October 2, 2016 Machinery A October 2, 2016 Machinery B October 1, 2017 (7) (10) (13) 6,600 Sum-of-the-years'-digits Straight-line