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sPlease help me solve #3 & #4 problems so I can have a better understanding of the problems Question #3 The Gene Thompkins Company constructed
sPlease help me solve #3 & #4 problems so I can have a better understanding of the problems
Question #3 The Gene Thompkins Company constructed a building for their manufacturing operation at a cost of $3,600,000 and occupied it beginning January, 2008. The newly constructed building's life was estimated to be 32 years, with a $300,000 salvage value. Ten years later, in January 2018, a new insulated passive solar roof was installed at a cost of $625,000; as a result of installing the new roof, the building's useful life was estimated to be 28 years from January 2018 going forward. In addition, the buildings salvage value at the end of 28 years was now estimated to be 250,000. The cost of the old roofwas $310,800. Reg uired (a) What amount of depreciation on the building should have been charged annually from the years 2008 through 2017? (Assume straightline depreciation.) (b) Prepare the journal entry that should be made in 2018 to record the replacement of the old roof with the new insulated passive solar roof? (c) What amount of depreciation should be charged for the year 2018? Question #4 Presented below is information related to equipment owned by Springs and Bertino Company at December 31, 2017: Cost: $8,750,000 Accumulated depreciation to date: $2,105,000 Expected future net cash ows: $4,750,000 Fair value: 3,650,000 Springs and Bertino plans to continue using the equipment in the future. As of December 31, 2017, the equipment has a remaining useful life of 4 years. Required (a) Prepare the journal entry for Springs and Bertino Company to record the impairment of the equipment at December 31, 2017. (b) Prepare the journal entry to record depreciation expense for 2018. (c) Due to an unexpected change in circumstances, the fair value of the equipment at December 31, 2018, is $4,525,000. Prepare the necessaryjournal entry (if any) to record this increase in fair valueStep by Step Solution
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