Spring 2022-BUS2101 Chapter 8 Homework Homework should always be hand-written (do not type) You are encouraged to see journal paper for journal entries (Questions 6 through 8). Colors are optional, but encouraged for this homework Question 1) Anson Company acquired real estate, on which it planned to construct a small office building, by paying $88,800 in cash. An old warehouse on the property was demolished at a cost of 58,888; the salvaged materials were sold for $1,777. Additional expenditures before construction began included $1,009 attorney's fee for work concerning the land purchase, $5,200 real estate broker's foe, $9,100 architect's fee, and $14,000 to put in driveways and a parking lot. Instructions: A) Determine the amount to be reported as the cost of the land. B) For each cost not used in part (a), indicate the account to be debited. Question 2) Megan Company purchased a new machine on August 1, 2020, at a cost of $90,000. The company estimated that the machine has a salvage value of $8,000, is expected to be used for 70,000 working hours, and will have an 8-year life. Instructions: A) Compute the depreciation expense under the straight-line method for 2020, 2024, and 2028, assuming a December 31 year-end. B) Compute the depreciation expense under the double-declining balance method for 2020 and 2021. C) Compute the depreciation expense under the units-of-activity method for 2020, assuming machine usage was 3,200 hours. (record depreciation per unit to the nearest cent.) Question 3) In recent years, Dobbs Company has purchased three machines. Because of a bad employee named Wares in the accounting department, a different accountant was hired to take charge of selecting the depreciation method for each machine. Information concerning the machines is summarized in the table below. Salvage Value Machine Acquired Cost Useful Life (in years) Depreciation method 1 Jan. 1, 2020 $96,000 2 July 1, 2021 $85,000 $12,000 $10,000 10 Straight-line 5 3 Nov. 1, 2021 $66,000 $ 6,000 6 Double-Declining Balance Units-of-Activity For the units-of-activity method, total machine hours are expected to be 30,000. Actual hours of use in the first years were: 2021, 800; 2022, 4,500; and 2023, 6,000. Instructions: A) Compute the amount of accumulated depreciation on each machine at December 31, 2023. B) If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense fo this machine in 2021? In 2022? Question 4) Anika Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchas on March 1, 2020, at a cost of $100,000. Over its 4-year useful life, the bus is expected to be driven 160,000 miles. Salvage value is expected to be $5,600. Instructions: Prepare a depreciation schedule (as shown in class) assuming actual mileage was: 2020, 40,000; 2021, 52,000; 2022, 41,000; and 2023, 27,000.