SA. Accounting for Property, Plant and Equipment During the first few days of the year, CoastCompany entered into the following transactions:1. Purchased a parcel of land with a building on it for $900,000 cash. The building, which will beused in operations, has an estimated useful life of 25 years and a salvage value of $60,000. Ofthe purchase price, $810,000 is allocated to the cost of the building, and the remaining balanceto the land.2. Paid $30,000 for the construction of an asphalt parking lot for customers. The parking lot isexpected to last 12 years and has no salvage value. Property, Plant and Equipment and Intangible Assets3. Paid $25,000 for the construction of a new entrance to the building.value is $6,000.5. Paid $220 freight on the new equipment.6. Paid $1,500 to repair damages to floor caused when the store equipment was accidentaledropped as it was moved into place.7. Paid $40 for an umbrella holder to place inside front door (customers may place wet umbrellasin the holder). The holder is expected to last 20 years.REQUIREDa. Determine the acquisition cost associated with each asset based on these transactions.b. Calculate the depreciation expense for the year. Double-declining balance depreciation is usedfor the equipment, and straight-line depreciation is used for the building and parking lot.

Cost of acquisition will include all those expenditures incurred to bring the asset to its current…

Accounting for Property, Plant and Equipment During the first few days of the year, Coast Company entered into the following transactions: 1. Purchased a parcel of land with a building on it for $900,000 cash. The building, which will be used in operations, has an estimated useful life of 25 years and a salvage value of $60,000. Of the purchase price, $810,000 is allocated to the cost of the building, and the remaining balance to the land. 2. Paid $30,000 for the construction of an asphalt parking lot for customers. The parking lot is expected to last 12 years and has no salvage value.

Accounting for Property, Plant and Equipment During the first few days of the year, Coast Company entered into the following transactions: 1. Purchased a parcel of land with a building on it for $900,000 cash. The building, which will be used in operations, has an estimated useful life of 25 years and a salvage value of $60,000. Of the purchase price, $810,000 is allocated to the cost of the building, and the remaining balance to the land. 2. Paid $30,000 for the construction of an asphalt parking lot for customers. The parking lot is expected to last 12 years and has no salvage value.

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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