Wk $6-$ Apply: Summative Assessment: Case Study $[$due Day $7]$ i

Bart's Company has prepared the $PP$&$t$ and depreciation schedule shown in txhibit $8\mathrm{.}54\mathrm{.}1$ below.

The following information is available. $($Assume the beginning balance has been audited$)$:

The land was purchased eight years ago when building $1$ was erected. The location was then remote but now is bordered by a major freeway. The appraised value of the land is $$35$ million.

Building $1$ has an estimated useful life of $35$ years and no residual value.

Building $2$ was built by a local contractor this year. It also has an estimated useful life of $35$ years and no residual value. The company occupied it on May $1$ this year.

Computer A system was purchased January $1$ six years ago when the estimated useful life was eight years with no residual value. It was sold on May $1$ for $$500,000.$

Computer B system was placed in operation as soon as Computer A system was sold. It is estimated to be in use for six years with no residual value at the end.

The company estimated the useful life of the press at $20$ years with no residual value.

Auto $1$ was sold during the year for $$1,000.$

Auto $2$ was purchased on July $1.$ The company expects to use it five years and then sell it for $$2,000.$

All depreciation is calculated on the straight$-$line method using months of service.

EXHIBIT $8\mathrm{.}54\mathrm{.}1$ PP&E and Depreciation

$\backslash$table$[[$Description$,$Asset Cost $(000$s$),$Accumulated Depreciation $(000$s$)],[\backslash$table$[[$Beginning$],[$Balance$]],$Added,Sold,$\backslash$table$[[$Ending$],[$Balance$]],\backslash$table$[[$Beginning$],[$Balance$]],$Added,Sold,$\backslash$table$[[$Ending$],[$Balance$]]],[$Land$,10,000,,,10,000,,,,],[$Building $1,30,000,,,30,000,6,857,857,,7,714],[$Building $2,,42,000,,42,000,,800,,800],[$Computer A$,5,000,,5,000,0,3,750,208,3,958,0],[$Computer B$,,3,500,,3,500,,583,,583],[$Press$,1\mathrm{.}500,,,1,500,300,150,,450],[$Auto $1,15,,15,0,15,,15,0],[$Auto $2,,22,\_,22,,2,,2],[$Total$,\backslash$bar $(46,515),45,522,5,015,\backslash$bar $(87,022),\backslash$bar $(10,922),\backslash$bar $(2,600),\backslash$bar $(3,973),\backslash$bar $(9,549)]]$

Required:

a$.$ Verify the depreciation calculations. Are there any errors? Put the errors in the form of an adjusting journal entry, assuming that $90$ percent of the depreciation on the buildings and the press has been charged to Cost of Goods Sold and $10$ percent is still capitalized in the inventory, and the other depreciation expense is classified as General and Administrative Expense $($i$.$e$.,$ building and press depreciation is considered a product cost; inventory on hand includes $10$ percent of the depreciation expense for buildings and the press: $$180,700$; Cost of Goods Sold contains the other $90$ percent: $$1,626,300).($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required". Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Enter your answers in dollars and not in millions or thousands of dollars.$)$