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Problem 8-2A Asset cost allocation; straight-line...

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Problem 8-2A Asset cost allocation; straight-line depreciation L.O. C1, C2, P1, P2 [The following information applies to the questions displayed below.] In January 2011, Solaris Co. pays $2,750,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office; it is appraised at $531,000, with a useful life of 20 years and an $70,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $619,500 that are expected to last another 12 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,799,500. Solaris also incurs the following additional costs: Cost to demolish Building 1 $ 341,400 Cost of additional land grading 191,400 Cost to construct new building (Building 3), having a useful life of 25 years and a $398,000 salvage value 2,242,000 Cost of new land improvements (Land Improvements 2) near Building 2 having a 20-year useful life and no salvage value 173,000 rev: 03-23-2011 references 1. value: 3 points Problem 8-2A Requirement 1 Requirement 1: Allocate the costs incurred by Solaris to the appropriate columns and total each column. (Round your answers to the nearest dollar amount. Leave no cells blank - be certain to enter "0" wherever required. Note when you are doing the allocation of the lump sum purchase price you should round the individual allocation percentage of each item purchased to a whole number before multiplying this allocation percentage by the purchase price. If the total of the three rounded percentages that you compute does not equal 100%, then you must adjust the percentage used for the Land Improvements so that the total of the three percentages does equal 100 percent. Omit the "$" sign in your response.) Land Building 2 Building 3 Land Improvements 1 Land Improvements 2 Purchase price $ $ $ $ $ Demolition Land grading New building New improvements Totals $ $ $ $ $ rev: 03-23-2011 eBook Links (4)references 2. value: 3 points Problem 8-2A Requirement 2 Requirement 2: Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1, 2011. (Use rounded values obtained in Requirement 1. Omit the "$" sign in your response.) Date General Journal Debit Credit Jan. 1 rev: 03-23-2011 eBook Links (4)references 3. value: 2 points Problem 8-2A Requirement 3 Requirement 3: Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the 12 months of 2011 when these assets were in use. (Round your answers to the nearest whole dollar amount. Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31 Dec. 31 Dec. 31 Dec. 31

 

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