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There are two parts to this problem a) & b) A company made the following expenditures in connection with the construction of a new building:
| There are two parts to this problem a) & b) | ||||
| A company made the following expenditures in connection with the construction of a new building: | ||||
| Architects fees | $12,000 | |||
| Cash paid for land and unusable building on the land | 300,000 | |||
| Removal of old building | 18,000 | |||
| Salvage from sale of old building materials | -4,000 | |||
| Construction survey | 1,500 | |||
| Legal fees for title search | 3,000 | |||
| Excavation for basement construction | 25,000 | |||
| Machinery purchased for operations | 100,000 | |||
| Freight on machinery purchased | 1,600 | |||
| Construction costs of new building | 1,000,000 | |||
| Construction of parking lot and driveway | 33,000 | |||
| Install perimeter fencing | 7,500 | |||
| Installation of machinery | 2,500 | |||
| a) Required: Prepare a schedule showing the amounts to be recorded as Land, Land Improvements, Buildings, and Machinery. | ||||
| (See pages 355 &356 Cost Determination for how to determine) | ||||
| Land | Land Improv | Buildings | Machinery | |
| Architects fees | ||||
| Cash paid for land and unusable building on the land | ||||
| Removal of old building | ||||
| Salvage from sale of old building materials | ||||
| Construction survey | ||||
| Legal fees for title search | ||||
| Excavation for basement construction | ||||
| Machinery purchased for operations | ||||
| Freight on machinery purchased | ||||
| Construction costs of new building | ||||
| Construction of parking lot and driveway | ||||
| Install perimeter fencing | ||||
| Installation of machinery | ||||
| Useful life | Indefinate | 15 years | 40 years | 10 years |
| Salvage | $5,000 | $250,000 | $25,000 | |
| Depreciation method | DDB | SL | DDB | |
| (DDB - double declining balance, SL - straight line) | ||||
| Assume that all assets are put in service on 7-1-16 | ||||
| b) Required: Calculate straight line for the Building in 2016 & 2017 | ||||
| Prepare depreciation schedules for the life of Land Improvements & Machinery (Round everything to a dollar) | ||||
| (Straight-line is on pages 358 & 359) (Double Declining Balance is on pages 360 & 361) (Partial year depreciation - page 362) | ||||
| Building | ||||
| 2016 | ||||
| 2017 | ||||
| Land Improvements | ||||
| 2016 | ||||
| 2017 | ||||
| 2018 | ||||
| 2019 | ||||
| 2020 | ||||
| 2021 | ||||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Machinery | ||||
| 2016 | ||||
| 2017 | ||||
| 2018 | ||||
| 2019 | ||||
| 2020 | ||||
| 2021 | ||||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| 2026 PLEASE show how you calculated the answer so it is easier to understand, thank you! | ||||
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Lean Auditing Driving Added Value And Efficiency In Internal Audit
Authors: James C. Paterson
1st Edition
1118896882, 978-1118896884
