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ith of acquisition a. Depreciation is computed from tne b. Land A and Building A were acquired from a predecessor corporation. At the time of acquisition, the land had a fair value of $72,000 and the b c. Land B was acquired on October 2, 2019, in exchange for 3,000 newly acquisition, the stock had a par value of $5 per share and a fair value o $10,400 to demolish an existing building on this land so it could constru d. Construction of Building B on the newly acquired land began on Octobe $210,000 of the estimated total construction costs of $300,000. Estima e. Certain equipment was donated to the corporation by the city. An indep the fair value at $16,000 and the residual value at $2,000. f. Equipment A's total cost of $110,000 includes installation charges of $5! value is estimated at $5,500. Equipment A was sold on February 1, 202 g. On October 1, 2020, Equipment B was acquired with a down payment

ith of acquisition a. Depreciation is computed from tne b. Land A and Building A were acquired from a predecessor corporation. At the time of acquisition, the land had a fair value of $72,000 and the b c. Land B was acquired on October 2, 2019, in exchange for 3,000 newly acquisition, the stock had a par value of $5 per share and a fair value o $10,400 to demolish an existing building on this land so it could constru d. Construction of Building B on the newly acquired land began on Octobe $210,000 of the estimated total construction costs of $300,000. Estima e. Certain equipment was donated to the corporation by the city. An indep the fair value at $16,000 and the residual value at $2,000. f. Equipment A's total cost of $110,000 includes installation charges of $5! value is estimated at $5,500. Equipment A was sold on February 1, 202 g. On October 1, 2020, Equipment B was acquired with a down payment

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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a. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. b. Land A and Building A were acquired from a predecessor corporation. Thompson paid $812,500 for the land and building together. At the time of acquisition, the land had a fair value of $72,000 and the building had a fair value of $828,000. c. Land B was acquired on October 2, 2019, in exchange for 3,000 newly issued shares of Thompson's common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $25 per share. During October 2019, Thompson paid $10,400 to demolish an existing building on this land so it could construct a new building. d. Construction of Building B on the newly acquired land began on October 1, 2020. By September 30, 2021, Thompson had paid $210,000 of the estimated total construction costs of $300,000. Estimated completion and occupancy are July 2022. e. Certain equipment was donated to the corporation by the city. An independent appraisal of the equipment when donated placed the fair value at $16,000 and the residual value at $2,000. f. Equipment A's total cost of $110,000 includes installation charges of $550 and normal repairs and maintenance of $11,000. Residual value is estimated at $5,500. Equipment A was sold on February 1, 2021. g. On October 1, 2020, Equipment B was acquired with a down payment of $4,000 and the remaining payments to be made in 10 annual installments of $4,000 each beginning October 1, 2021. The prevailing interest rate was 8%. Required: Supply the correct amount for each answer box on the schedule. (Round your intermediate calculations and final answers to the nearest whole dollar.) THOMPSON CORPORATION Fixed Asset and Depreciation Schedule For Fiscal Years Ended September 30, 2020, and September 30, 2021 Acquisition Date Depreciation Method Estimated Life in Years Depreciation for Year Ended 9/30 Assets Cost Residual 2020 2021 Land A 10/1/2019 $ 65,000 N/A not applicable N/A N/A N/A Building A 10/1/2019 747,500 $47,500 Straight-line 50 $ 14,000 Land B 10/2/2019 85,400 N/A not applicable N/A N/A N/A Building B Donated Equipment Under construction 210,000 to date Straight-line 30 10/2/2019 16,000 2,000 200% Declining balance 10 Equipment A 10/2/2019 99,000 5,500 Sum-of-the years'-digits 10 17,000 Equipment B 10/1/2020 30,840 Straight-line 15
Transcribed Image Text:a. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. b. Land A and Building A were acquired from a predecessor corporation. Thompson paid $812,500 for the land and building together. At the time of acquisition, the land had a fair value of $72,000 and the building had a fair value of $828,000. c. Land B was acquired on October 2, 2019, in exchange for 3,000 newly issued shares of Thompson's common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $25 per share. During October 2019, Thompson paid $10,400 to demolish an existing building on this land so it could construct a new building. d. Construction of Building B on the newly acquired land began on October 1, 2020. By September 30, 2021, Thompson had paid $210,000 of the estimated total construction costs of $300,000. Estimated completion and occupancy are July 2022. e. Certain equipment was donated to the corporation by the city. An independent appraisal of the equipment when donated placed the fair value at $16,000 and the residual value at $2,000. f. Equipment A's total cost of $110,000 includes installation charges of $550 and normal repairs and maintenance of $11,000. Residual value is estimated at $5,500. Equipment A was sold on February 1, 2021. g. On October 1, 2020, Equipment B was acquired with a down payment of $4,000 and the remaining payments to be made in 10 annual installments of $4,000 each beginning October 1, 2021. The prevailing interest rate was 8%. Required: Supply the correct amount for each answer box on the schedule. (Round your intermediate calculations and final answers to the nearest whole dollar.) THOMPSON CORPORATION Fixed Asset and Depreciation Schedule For Fiscal Years Ended September 30, 2020, and September 30, 2021 Acquisition Date Depreciation Method Estimated Life in Years Depreciation for Year Ended 9/30 Assets Cost Residual 2020 2021 Land A 10/1/2019 $ 65,000 N/A not applicable N/A N/A N/A Building A 10/1/2019 747,500 $47,500 Straight-line 50 $ 14,000 Land B 10/2/2019 85,400 N/A not applicable N/A N/A N/A Building B Donated Equipment Under construction 210,000 to date Straight-line 30 10/2/2019 16,000 2,000 200% Declining balance 10 Equipment A 10/2/2019 99,000 5,500 Sum-of-the years'-digits 10 17,000 Equipment B 10/1/2020 30,840 Straight-line 15
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