Valix Finacc vol 1 Problem 16-12

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 16 Problem 16-12

                                                                                Land       

                                                             Land       improvements    Building           Machinery

Balances, Jan. 1                              3,500,000         900,000          7,000,000            1,500,000

Land acquired                     1,250,000

Issuance of share capital:

      12/36 x 4,500,000                        1,500,000

      24/36 x 4,500,000                                                                   3,000,000

New machinery                                                                                                    3,400,000

New parking lot, street and

      sidewalk                                                          750,000

Machinery sold                               ________       ________      _________            (    500,000)

Balances, Dec. 31                            6,250,000      1,650,000      10,000,000            4,400,000

The “assessed values” do not represent the fair values of the land and building but are used in allocating the market value of the share capital.