A company made the following expenditures in connection with the construction of a new building:Architect's fees100,00014,400,000Cash paid for land and unusable building on the landConstruction costs of new building48,000,000Construction survey50,000Excavation for basement construction1,200,00076,800Freight on machinery purchasedInstallation of machineryLegal fees for title searchMachinery purchased for operationsRemoval of old buildingSalvage from sale of old building materials120,000144,0004,800,000864,000(192,000)Special base for the machinery10,000Answer the following:1. How much should be recorded as cost of Land, Building and Machinery?2. Assuming that the Building will be depreciated over 10 years with no salvage value, how much should bethe annual depreciation expense?3. Assume that the company will use unit-of production method for the depreciation of machinery. Theestimated total production is 1000.000 units with the following production for the next 5 years of its life:30%, 35%, 20% 10%, 5%, respectively each year. The machine has no salvage value. What will be thedepreciation expense for the third year?

Fixed assets are defined as the resources held with the entity which helps to generate business…

Answer the following: 1. How much should be recorded as cost of Land, Building and Machinery? 2. Assuming that the Building will be depreciated over 10 years with no salvage value, how much should be the annual depreciation expense? 3. Assume that the company will use unit-of production method for the depreciation of machinery. The estimated total production is 1000.000 units with the following production for the next 5 years of its life: 30%, 35%, 20% 10%, 5%, respectively each year. The machine has no salvage value. What will be the depreciation expense for the third year?

Answer the following: 1. How much should be recorded as cost of Land, Building and Machinery? 2. Assuming that the Building will be depreciated over 10 years with no salvage value, how much should be the annual depreciation expense? 3. Assume that the company will use unit-of production method for the depreciation of machinery. The estimated total production is 1000.000 units with the following production for the next 5 years of its life: 30%, 35%, 20% 10%, 5%, respectively each year. The machine has no salvage value. What will be the depreciation expense for the third year?

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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