n January 1, 2015, Wanja Lim
On January 1, 2015, Wanja Limited (which has a Dec 31st year end) purchased the assets of Kong Limited
for $ 2,000,000. It was a cash transaction for which Wanja secured a bank loan. Kong’s assets included
land, buildings and equipment. Land was appraised for $1,000,000, buildings $2,000,000 and Equipment
$1,000,000. Buildings have an estimated useful life of 20 years while equipment has an estimated life of 10
years and no residual value.
a) Do the complete
b) On January 1st, 2019, a major improvement was made to the Equipment costing $200,000. As a result,
the production capacity doubled, but its expected life remained unchanged. On 31st March 2019 Wanja
limited paid Joy limited for repairs and maintenance services of the equipment for $72,000. On December
31st equipment
in the books of Wanja Limited.
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why do you divide the land, building and equipment by 2?
by Bartleby Experthow did you get the Equipment
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