Lancaster Company decides to build its own factory on land owned by the firm. It cost Lancaster $186,000 to do this. When the factory was completed, a professional appraisal showed the market value of the building to be $220,000 sitting on a piece of land worth $50,000 that was acquired years ago for $15,500. Required 1: What amount is reported in the balance sheet as the value of the land on Lancaster's book? $ Required 2: What value should the new constructed building be shown at on Lancaster's books? $ Required 3: If the building constructed will be depreciated in 50 years with no residual value (assume straight-line depreciation is used), what is the depreciation expense for the first full year of use? $
Lancaster Company decides to build its own factory on land owned by the firm. It cost Lancaster $186,000 to do this. When the factory was completed, a professional appraisal showed the market value of the building to be $220,000 sitting on a piece of land worth $50,000 that was acquired years ago for $15,500.
Required 1: What amount is reported in the
Required 2: What value should the new constructed building be shown at on Lancaster's books? $
Required 3: If the building constructed will be
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