The Thompson Corporation, a manufacturer of steel products, began operations on October 1, 2022. The accounting department of Thompson has started the fixed-asset and depreciation schedule presented below. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel: Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. Land A and Building A were acquired from a predecessor corporation. Thompson paid $912,500 for the land and building together. At the time of acquisition, the land had a fair value of $100,000 and the building had a fair value of $900,000. Land B was acquired on October 2, 2022, in exchange for 4,000 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 $35 per share. During October 2022, Thompson paid $11,400 to demolish an existing building on this land so it could construct a new building. Construction of Building B on the newly acquired land began on October 1, 2023. By September 30, 2024, Thompson had paid $310,000 of the estimated total construction costs of $400,000. Estimated completion and occupancy are July 2025. Certain equipment was donated to the corporation by the city. An independent appraisal of the equipment when donated placed the fair value at $20,000 and the residual value at $3,000. Equipment A’s total cost of $116,000 includes installation charges of $650 and normal repairs and maintenance of $11,000. Residual value is estimated at $9,000. Equipment A was sold on February 1, 2024. On October 1, 2023, Equipment B was acquired with a down payment of $5,000 and the remaining payments to be made in 10 annual installments of $5,000 each beginning October 1, 2024. The prevailing interest rate was 9%. Required: Supply the correct amount for each answer box on the schedule.

The Thompson Corporation, a manufacturer of steel products, began operations on October 1, 2022. The accounting department of Thompson has started the fixed-asset and depreciation schedule presented below. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel: Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. Land A and Building A were acquired from a predecessor corporation. Thompson paid $912,500 for the land and building together. At the time of acquisition, the land had a fair value of $100,000 and the building had a fair value of $900,000. Land B was acquired on October 2, 2022, in exchange for 4,000 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 $35 per share. During October 2022, Thompson paid $11,400 to demolish an existing building on this land so it could construct a new building. Construction of Building B on the newly acquired land began on October 1, 2023. By September 30, 2024, Thompson had paid $310,000 of the estimated total construction costs of $400,000. Estimated completion and occupancy are July 2025. Certain equipment was donated to the corporation by the city. An independent appraisal of the equipment when donated placed the fair value at $20,000 and the residual value at $3,000. Equipment A’s total cost of $116,000 includes installation charges of $650 and normal repairs and maintenance of $11,000. Residual value is estimated at $9,000. Equipment A was sold on February 1, 2024. On October 1, 2023, Equipment B was acquired with a down payment of $5,000 and the remaining payments to be made in 10 annual installments of $5,000 each beginning October 1, 2024. The prevailing interest rate was 9%. Required: Supply the correct amount for each answer box on the schedule.

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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Required:

Supply the correct amount for each answer box on the schedule.

Assets
Land A
Building A
Land B
Building B
Donated Equipment
Equipment A
Equipment B
THOMPSON CORPORATION
Fixed Asset and Depreciation Schedule
For Fiscal Years Ended September 30, 2023, and September 30, 2024
Acquisition
Date
10/1/2022
10/1/2022
10/2/2019
Under construction
10/2/2022
10/2/2022
10/1/2023
Cost
310,000 to date
Residual
$
N/A
86,250
N/A
3,000
9,000
Depreciation
Method
not applicable
Straight-line
not applicable
Straight-line
200% Declining balance
Straight-line
Straight-line
Estimated
Life in Years
N/A
N/A
30
10
10
15
$
Depreciation for
Year Ended 9/30
2023
N/A
15,000
N/A
2024
N/A
N/A

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