Homework Solutions  
» Home
  

See All Homework
Questions here

Question Description

 
Posted by: accountinghelp
Price Quoted by Student: $7
Posted On: 2013-05-23 03:03:00
 
Question

In January 2011, InTech Co. pays $1,350,000 for a tract of land with two buildings. It plans to demolish Building A and

 

P10-2B Asset cost allocation; straightline Depreciation - In January 2011, InTech Co. pays $1,350,000

 

P10-2B  In January 2011, InTech Co. pays $1,350,000 for a tract of land with two buildings. It plans to demolish Building A and build a new shop in its place. Building B will be a company office; it is appraised at $472,770, with a useful life of 15 years and a $90,000 salvage value. A lighted parking lot near Building B has improvements (Land Improvements B) valued at $125,145 that are expected to last another six years with no salvage value. Without the buildings and improvements, the tract of land is valued at $792,585. The company also incurs the following additional costs.

 

Cost to demolish Building A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $ 117,000

Cost of additional land grading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    172,500

Cost to construct new building (Building C), having a useful life of 20 years

and a $295,500 salvage value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        1,356,000

Cost of new land improvements (Land Improvements C) near Building C,

having a 10-year useful life and no salvage value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       101,250

 

Required

1. Prepare a table with the following column headings: Land, Building B, Building C, Land Improvements B, and Land Improvements C. Allocate the costs incurred by InTech to the appropriate columns and total each column (round percents to the nearest 1%).

2. Prepare a single journal entry to record all incurred costs assuming they are paid in cash on January 1, 2011.

3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the 12 months of 2011 when these assets were in use.

 

Check (1) Land costs, $1,059,000; Building B costs, $459,000 (3) Depr.óLand Improv. B and C, $20,250 and $10,125


Solutions
Problem 10-2B Part 1  
Price $7
Attachment 1: P10-2B In January 2011.doc
Solution Posted By: Accountinghelp    Posted on: 23-05-2013