Semester Case - Cowboy Ice Cream, Inc. In an effort to enable growth within the company, CIC is considering purchase of a building and the land on which it is located. They believe they've found the ideal property and have negotiated a purchase price of $625,000. The land has been appraised at $306,000 and building at $374,000. If CIC makes this purchase, some substantial remodel work will need to be done to the building. They've selected a potential contractor and negotiated a price of $95,000 for labor and materials. CIC estimates that the building will have an estimated useful life of 30 years with a $50,000 salvage value. Once the remodeling is complete, CIC will also purchase and install a freezer that has a list price of $3,700. The supplier offers a 3 percent discount if CIC pays cash (which it plans to do). Delivery terms were FOB shipping point and freight costs will be $450. The freezer will require special installation which will cost $250. CIC estimates the freezer will have an estimated useful life of 7 years and a salvage value of $300. Opening this location will mean that CIC will likely generate additional wages and other operating expenses of $52,000 per year. Before completing any of the above transactions, CIC would also acquire $800,000 by signing a note payable. Assuming CIC enters into the above transactions and operates the new location for one year, record the impact of each of the above items on the statement model provided on the next page. CIC uses the straight line method of depreciation. Round all computations to the nearest whole dollar. Additionally, complete the depreciation schedule for the life of the freezer. Survey of Accounting Packet 19 Assets Event Ligb Equity Rev Exp Net Inc. Cash Flow Cash Equip. Accum. Depr. Land Building Sign note Purch. building Remodel building Purch. & install freezer Pay operating expenses Record derc building Record depr: freezer