On January 1, 2020, Williamsburg Inc. acquired a piece of land to construct a manufacturing plant. Youhave the following information about this transaction:$240,0004% of price$5,000Price of landTax on transfer of landLegal free to transfer property of land toWilliamsburg$6,000$1,000$860,000$2,100$6,400Cost of demolishing old building on the landIncome from scrap that was sold of old buildingCost of manufacturing building constructionCost of insurance during constructionCost of annual insurance on manufacturing buildingafter the construction is finishedCost to repair a piece of equipment used in the$1,000factories constructionManagement decided to allocate the following amounts to the parts of the factory building, andestimated the corresponding useful lives and residual values as follows:Allocated cost Useful life Residual valueAllocated CostUseful LifeResidual Value$20,000$1,000$0$4,000$10,000Windows10 years$20,000$100,000Furnace10 yearsEquipment12 yearsBuildingRest of manufacturing40 yearsplant total costThe building was ready for use on September 1, 2020, but Williamsburg Inc. started using it on October31st, 2020. Williamsburg Inc. applies IFRS.RequiredA) Calculate the total cost of land and of the office building and prepare the appropriate journal entryassuming everything was paid for in cash.B) Calculate the total depreciation expense to be recorded on December 31, 2020 assuming the straight-line method is used for all assets.

Solution : Requirement (A). Total cost of land and office building TOTAL COST OF LAND Total cost…

Answered: On January 1, 2020, Williamsburg Inc.…

On January 1, 2020, Williamsburg Inc. acquired a piece of land to construct a manufacturing plant. You have the following information about this transaction:

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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Hello! I need help with the following accounting question regarding the calculation of the amount of depreciation expenses calculated under the assumtpions attatched below. Thank you in advance!
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