Question #2 (23.5 marks) Taylor's Treats needs your help in accounting for the following long-term asset...

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Question #2 (23.5 marks) Taylor's Treats needs your help in accounting for the following long-term asset transactions. Jan 1, 2021 - Taylor's Treats purchased Matty's Muffins for $10 million cash. The market values of Matty's assets and liabilities are $15.5 million and $7.5 million, respectively. Jan 2, 2021 - Taylor's Treats purchased land, a building and some equipment for a total cost of $900,000. At the time of acquisition, the land has a current fair value of $450,000, the building's fair value is $400,000 and the equipment's fair value is $150,000. Taylor paid $500,000 cash, and signed a note payable for the remainder. December 31, 2021 - Depreciation is recorded as follows: Equipment is depreciated by the double diminishing-balance method over a 5 year life with a $30,000 residual value. The building has a 40 year useful life and residual value of $50,000. Depreciation is calculated on a straight-line basis for the building. December 31, 2022 - Depreciation is recorded. January 1, 2023 - Sold all of the equipment for $50,000 cash. Question #2 (23.5 marks) Taylor's Treats needs your help in accounting for the following long-term asset transactions. Jan 1, 2021 - Taylor's Treats purchased Matty's Muffins for $10 million cash. The market values of Matty's assets and liabilities are $15.5 million and $7.5 million, respectively. Jan 2, 2021 - Taylor's Treats purchased land, a building and some equipment for a total cost of $900,000. At the time of acquisition, the land has a current fair value of $450,000, the building's fair value is $400,000 and the equipment's fair value is $150,000. Taylor paid $500,000 cash, and signed a note payable for the remainder. December 31, 2021 - Depreciation is recorded as follows: Equipment is depreciated by the double diminishing-balance method over a 5 year life with a $30,000 residual value. The building has a 40 year useful life and residual value of $50,000. Depreciation is calculated on a straight-line basis for the building. December 31, 2022 - Depreciation is recorded. January 1, 2023 - Sold all of the equipment for $50,000 cash.