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 companys records and personnel:

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 5%

Equipment & Machinery 10%

Estimated useful lives and depreciation method is assumed, unless stated differently, as follows:

Buildings 40 years SL

Equipment & Machinery 10 years DDB

Required:

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.

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.

Equipment was acquired on January 2, 2021 for $45,000. Calculate the book value of the equipment as of December 31, 2022.

Machine As 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.