Sarah Limited ,after launching a new department, decided to buy some additional capital assets. The company negotiated with a company which was going bankrupt. It purchased land , building and equipment for $750,000.

The accountant of Sarah company had to estimate the book value of each long-term asset based on market value of these assets as given in the table below:

REQUIRED

Use the information on the table and estimate the price of each asset purchased by Sarah Limited.

PART B

The company above depreciate the building using double declining approach. Additional information is provided to depreciate the building . they are as follows:

Estimated salvage value = $70,000

Estimated useful life = 6 years

Purchase date = April 30, 2018

REQUIRED

1. Make a depreciation schedule for the building using double declining method.

2. Journalize the depreciation expense for year 2018

3. Give a balance sheet extract for the year 2020.

Assets

Market Value $

Land

310,000

Building

230,000

Equipment

160,000

PART C

The company decided to depreciate equipment using units of production, The table below contains details of production for the following years and some additional information

The equipment is estimated to have the capacity to produce 90,000 units. The salvage value of the equipment is $ 30,000

REQUIRED

1. Make a depreciation schedule for the equipment purchased.

2. Journalize the deprecation expense for 2019.

3. Give a balance sheet extract for 2021