Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Kristopher Corporation, a manufacturer of steel products, began operations on January 1, 2021. They have a December 31 year-end. The following information has

image text in transcribed

The Kristopher Corporation, a manufacturer of steel products, began operations on January 1, 2021. They have a December 31 year-end. The following information has been attained from the company's records and personnel: i. ii. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. Residual value is assumed, unless stated differently, as follows: Buildings Equipment & Machinery 5% 10% Estimated useful lives and depreciation method is assumed, unless stated differently, as follows: Buildings 40 years SL Equipment & Machinery 10 years DDB Required: a. Land A and Building A were acquired on January 1, 2022 from a predecessor corporation. Kristopher paid $1,250,000 for the land and building together. The total cost was allocated between land and building as follows: Land $200,000 and Building $1,050,000. Calculate the book value of the building at December 31, 2022. b. Land B was acquired on January 2, 2022, in exchange for $175,000. During January 2022, Kristopher paid $12,000 to demolish an existing building on this land so it could construct a new building. However, they received $1,500 from the sale of the salvaged material. Calculate the amount that Kristopher should capitalize for Land B. c. Equipment was acquired on January 2, 2021 for $45,000. Calculate the book value of the equipment as of December 31, 2022. d. Machine A's total cost (acquired on January 1, 2021) of $220,000 includes installation charges of $550 and normal repairs and maintenance of $8,000. Machine A was sold on March 1, 2022 for $156,000. Calculate the gain or loss that should be recorded on the sale of the machinery.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting Tools for Business Decision Making

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

7th edition

978-1118334331, 1118334337, 978-1119036449, 1119036445, 978-1119036432

More Books

Students also viewed these Accounting questions