[The following information applies to the questions displayed below.]On December 2 of year 1, Javier purchased a building, including the land it was on, to assemble his new equipment. Thetotal cost of the purchase was $1,620,000; $385,000 was allocated to the basis of the land and the remaining $1,235,000was allocated to the basis of the building. (Use MACRS Table 1, Table 2. Table 3, Table 4 and Table 5.)Note: Do not round Intermediate calculations. Round your answers to the nearest whole dollar amount.a. Using MACRS, what is Javier's depreciation deduction on the building for years 1 through 3?DepreciationExpenseYear 1Year 2Year 3

To calculate Javier's depreciation deduction for the building using the Modified Accelerated Cost…

Answered: [The following information applies to…

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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Renata purchases a building and land for a lump sum price of $1,000,000. Renata hires an appraiser that determines a fair market value for the land $325,000 and the fair market value of the building is $725,000. What is Renata's basis in the land and the building? OLand $300,000 and building $700,000 OLand $310,000 and building $690,000. OLand $325,000 and building $725,000 OLand $325,000 and building $$675,000
John’s uncle donated a truck to his company, John’s Corporation. The truck had an original cost of $95,000, a book value of $40,000, and a fair value of $55,000. The journal entry by John’s Corporation to record this donated asset will include a a. debit Truck for $60,000 and credit Gain for $20,000. b. debit Truck for $55,000 and credit Gain for $55,000. c. debit Truck for $95,000 and credit Gain for $95,000. d. debit Truck for $60,000 and credit Gain for $60,000.
The city of Fairbanks donated land to the Big Oil Company on June 1, 2006, that originally cost the city $900,000. On June 1, 2006, the land was estimated to be worth $1,350,000, and on December 31, 2006, the land's value was estimated to be $1,400,00. On Big Oil Company's balance sheet at December 31, 2006, the land should be valued at a. $1,400,000 b. $1,350,000 c. $900,000 d. $0
Please explain
The president of ACCO 202 Corporation donated a building to Ana G. Méndez Corporation. The building had an original cost of $200,000, a book value of $75,000, and a fair market value of $180,000. To record this donation, Ana G. Méndez would a. Make a memorandum entry b. Debit Building for $75,000 and credit Gain for $75,000 c. Debit Building for $200,000 and credit Gain for $200,000 d. Debit Building for $180,000 and credit Gain for $180,000
Required information [The following information applies to the questions displayed below.] Carl purchased an apartment complex for $3.5 million on March 17 of year 1. of the purchase price, $1,500,000 was attributable to the land the complex sits on. He also installed new furniture into half of the units at a cost of $84,000. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Note: Enter your answers in dollars and not in millions of dollars. b. What is Carl's allowable depreciation deduction for year 3 if the real property is sold on January 2 of year 3? Note: Do not round intermediate computations. Round your final answer to the nearest whole dollar amount. Depreciation for year 3
A company purchased land for $91000 cash. Real estate brokers' commission was $6000 and $6900 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land would be recorded at O $69000. O $103900. O $91000. O $109900.
The Blowing Rock Partnership purchased land for $1,200,000 with plans to build a spa on the site. The partnership tore down several buildings on the property for $20,000. Salvaged materials with a cost of $6,000 will be repurposed in the spa. Trees were removed for $5,000 and drainage was added for $30,000. The area was fenced for $41,000. A preliminary consultation with an architect cost $2,500 and legal fees of $3,200 were paid in connection with changing the zoning of the property. What accounts will be debited for these costs? O Land, $1,249,000; Land Improvements, $41,000; Building, $5,700 O Land, $1,235,000; Land Improvements, $55,000; Architect Expense, $2,500,000; Legal Expense, $3,200 Land, $1,255,000; Land Improvements, $41,000; Building, $11,700 O Land, $1,249,000; Land Improvements, $41,000; Building, $2,500; Legal Expense, $3,200
S Required information [The following information applies to the questions displayed below.] Carl purchased an apartment complex for $3.5 million on March 17 of year 1. of the purchase price, $1,500,000 was attributable to the land the complex sits on. He also installed new furniture into half of the units at a cost of $84,000. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Note: Enter your answers in dollars and not in millions of dollars. a. What is Carl's allowable depreciation deduction for his real property for years 1 and 2? Note: Round your final answers to the nearest whole dollar amount. Year 1 Year 2 Depreciation Deduction
(1) At the beginning of Year 1 Timmy purchased a 200-acre farm in Oldham County, Texas. He immediately proceeded to begin growing crops for sale. He irrigates his crops using water from the Ogallala formation. At the time of purchase Timmy was advised by a qualified hydrologist that there were approximately 200,000,000 cubic meters of recoverable Ogallala water un- der his farm. On the basis of this report Timmy, on your advice, allocated $6 mil- lion of his $20 million purchase price to the water. At the very beginning of Year 2 the hydrologist came back and estimated that as of that time there remained 194,000,000 cubic meters of recoverable water under Timmy's farm. Calculate and explain Timmy's Year 1 cost depletion deduction.

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