A company made the following expenditures in connection with the construction of a new building: Architect's fees 100,000 14,400,000 Cash paid for land and unusable building on the land Construction costs of new building 48,000,000 Construction survey 50,000 Excavation for basement construction 1,200,000 Freight on machinery purchased Installation of machinery 76,800 120,000 Legal fees for title search 144,000 Machinery purchased for operations 4,800,000 Removal of old building 864,000 Salvage from sale of old building materials Special base for the machinery (192,000) 10,000 Answer the following: 1. How much should be recorded as cost of Land, Building and Machinery? 2. Assuming that the Building will be depreciated over 10 years with no salvage value, how much should be the annual depreciation expense? 3. Assume that the company will use unit-of production method for the depreciation of machinery. The estimated total production is 1,000,000 units with the following production for the next 5 years of its life: 30%, 35%, 20%, 10%, 5%, respectively each year. The machine has no salvage value. What will be the depreciation expense for the third year?

A company made the following expenditures in connection with the construction of a new building: Architect's fees 100,000 14,400,000 Cash paid for land and unusable building on the land Construction costs of new building 48,000,000 Construction survey 50,000 Excavation for basement construction 1,200,000 Freight on machinery purchased Installation of machinery 76,800 120,000 Legal fees for title search 144,000 Machinery purchased for operations 4,800,000 Removal of old building 864,000 Salvage from sale of old building materials Special base for the machinery (192,000) 10,000 Answer the following: 1. How much should be recorded as cost of Land, Building and Machinery? 2. Assuming that the Building will be depreciated over 10 years with no salvage value, how much should be the annual depreciation expense? 3. Assume that the company will use unit-of production method for the depreciation of machinery. The estimated total production is 1,000,000 units with the following production for the next 5 years of its life: 30%, 35%, 20%, 10%, 5%, respectively each year. The machine has no salvage value. What will be the depreciation expense for the third year?

Name: A company made the following expenditures in connection with the cons
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Description: A company made the following expenditures in connection with the construction of a new building:Architect's fees100,00014,400,000Cash paid for land and unusable building on the landConstruction costs of new building48,000,000Construction survey50,00

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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