1. Cala Manufacturing purchases a large lot onwhich an old building is located as part of its plans to build a new plant.The negotiated purchase price is $269,000 for the lot plus $164,000 for theold building. The company pays $26,200 to tear down the old building and$38,730 to fill and level the lot. It also pays a total of $1,545,568 inconstruction costs—this amount consists of $1,453,800 for the new buildingand $91,768 for lighting and paving a parking area next to the building. Prepare a single journal entry to recordthese costs incurred by Cala, all of which are paid in cash. Liltua Company pays$385,000 for real estate plus $20,405 in closing costs. The real estateconsists of land appraised at $214,200; land improvements appraised at$102,000; and a building appraised at $193,800. 2.Allocate the totalcost among the three purchased assets.(Round your “Apportioned Cost” answers to 2decimal places.) rev:11_26_2013_QC_41255 3.Prepare the journal entry to record the purchase.(Round your answers to2 decimal places.) 4.In early January2013, NewTech purchases computer equipment for $119,000 to use inoperating activities for the next four years. It estimates the equipment’ssalvage value at $24,000. Prepare a tableshowing depreciation and book value for each of the four years assumingstraight-line depreciation. 5.In early January2013, NewTech purchases computer equipment for $160,000 to use in operatingactivities for the next four years. It estimates the equipment’s salvagevalue at $28,000. Prepare a tableshowing depreciation and book value for each of the four years assumingdouble-declining-balance depreciation.6.On April 1, 2012, Cyclone’s Backhoe Co. purchases a trencher for $280,000. The machine isexpected to last four years and have a salvage value of $28,000. Computedepreciation expense for both 2012 and 2013 assuming the company usesthe straight-line method.
1.
Cala Manufacturing purchases a large lot on
which an old building is located as part of its plans to build a new plant.
The negotiated purchase price is $269,000 for the lot plus $164,000 for the
old building. The company pays $26,200 to tear down the old building and
$38,730 to fill and level the lot. It also pays a total of $1,545,568 in
construction costs—this amount consists of $1,453,800 for the new building
and $91,768 for lighting and paving a parking area next to the building.
Prepare a single
these costs incurred by Cala, all of which are paid in cash.
Liltua Company pays
$385,000 for real estate plus $20,405 in closing costs. The real estate
consists of land appraised at $214,200; land improvements appraised at
$102,000; and a building appraised at $193,800.
2.Allocate the total
cost among the three purchased assets.(Round your “Apportioned Cost” answers to 2
decimal places.)
rev:
11_26_2013_QC_41255
3.Prepare the journal entry to record the purchase.(Round your answers to
2 decimal places.)
4.In early January
2013, NewTech purchases computer equipment for $119,000 to use in
operating activities for the next four years. It estimates the equipment’s
salvage value at $24,000.
Prepare a table
showing
straight-line depreciation.
5.In early January
2013, NewTech purchases computer equipment for $160,000 to use in operating
activities for the next four years. It estimates the equipment’s salvage
value at $28,000.
Prepare a table
showing depreciation and book value for each of the four years assuming
double-declining-balance depreciation.
6.On April 1, 2012,
Cyclone’s Backhoe Co. purchases a trencher for $280,000. The machine is
expected to last four years and have a salvage value of $28,000.
Compute
depreciation expense for both 2012 and 2013 assuming the company uses
the straight-line method.
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