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) a. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. b. Land A and Building A were acquired from a predecessor corporation. Thompson paid $782,500 for the land and building together. At the time of acquisition, the land had a fair value of $87,000 and the building had a fair value of $783,000. c. Land B was acquired on October 2, 2022, in exchange for 2,700 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 $22 per share. During October 2022, Thompson paid $10,100 to demolish an existing building on this land so it could construct a new building. d. Construction of Building B on the newly acquired land began on October 1, 2023. By September 30, 2024, Thompson had paid $180,000 of the estimated total construction costs of $270,000. Estimated completion and occupancy are July 2025. e. Certain equipment was donated to the corporation by the city. An independent appraisal of the equipment when donated placed
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) a. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. b. Land A and Building A were acquired from a predecessor corporation. Thompson paid $782,500 for the land and building together. At the time of acquisition, the land had a fair value of $87,000 and the building had a fair value of $783,000. c. Land B was acquired on October 2, 2022, in exchange for 2,700 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 $22 per share. During October 2022, Thompson paid $10,100 to demolish an existing building on this land so it could construct a new building. d. Construction of Building B on the newly acquired land began on October 1, 2023. By September 30, 2024, Thompson had paid $180,000 of the estimated total construction costs of $270,000. Estimated completion and occupancy are July 2025. e. Certain equipment was donated to the corporation by the city. An independent appraisal of the equipment when donated placed
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Yogesh
Transcribed Image Text: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)
a. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition.
b. Land A and Building A were acquired from a predecessor corporation. Thompson paid $782,500 for the land and building
together. At the time of acquisition, the land had a fair value of $87,000 and the building had a fair value of $783,000.
c. Land B was acquired on October 2, 2022, in exchange for 2,700 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 $22 per share. During October 2022, Thompson paid
$10,100 to demolish an existing building on this land so it could construct a new building.
d. Construction of Building B on the newly acquired land began on October 1, 2023. By September 30, 2024, Thompson had paid
$180,000 of the estimated total construction costs of $270,000. Estimated completion and occupancy are July 2025.
e. Certain equipment was donated to the corporation by the city. An independent appraisal of the equipment when donated placed
the fair value at $14,800 and the residual value at $1,700.
f. Equipment A's total cost of $117,800 includes installation charges of $520 and normal repairs and maintenance of $11,000.
Residual value is estimated at $9,000. Equipment A was sold on February 1, 2024.
g. On October 1, 2023, Equipment B was acquired with a down payment of $3,700 and the remaining payments to be made in 10
annual installments of $3,700 each beginning October 1, 2024. The prevailing interest rate was 9%.
Required:
Supply the correct amount for each answer box on the schedule.
Note: Round your intermediate calculations and final answers to the nearest whole dollar.
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
180,000 to date
14,800
Residual
$
N/A
46,650
N/A
1,700
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
$ 13,700
N/A
2024
N/A
N/A
0
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 8 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education