Valix Finacc vol 1 Problem 17-18

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 17 Problem 17-18

1. Beginning balance                                                                                                  875,000

    Acquisition (150,000 / 750,000 x 1,250,000)                                                               250,000

    Total cost of land                                                                                                 1,125,000

    Technically, the land for undetermined use is an investment property.

2. Old (7,500,000 – 1,644,500 x 8%)                                                                               468,440

    New (600,000/750,000 x 1,250,000 = 1,000,000 x 8%)                                                   80,000

    Depreciation – building                                                                                          548,440

3.  2,250,000 / 10                                                                                                          225,000

    400,000 / 10 x 6/12                                                                                                     20,000

    Depreciation – machinery                                                                          245,000

4. Depreciation – leasehold improvements (216,000 – 108,000 / 5 years)                      21,600

 

5. Depreciation – land improvements 192,000 / 12 x 9/12)                                           12,000