Cullumber paid $48,000 to replace part of the factory floor. The floor had been capitalized as part of the factory building when itwas purchased ten years previously and was not considered a separate component. When purchased, the building had beenassumed to have a 30-year useful life and was being depreciated on a straight-line basis. At the time of the floor replacement, thebuilding had been depreciated for 10 years. Cullumber estimated that the original cost of the floor would have been 15% cheaperthan the new replacement, due to inflation.Prepare the journal entries to record these transactions, assuming Cullumber follows IFRS. (Credit account titles are automaticallyindented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O forthe amounts. List all debit entries before credit entries.)

To prepare the journal entries for Cullumber under IFRS for the replacement of part of the factory…

Answered: Cullumber paid $48,000 to replace part…

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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Tree Lovers Inc. purchased 100 acres of woodland in which the company intends to harvest the complete forest, leaving the land barren and worthless. Tree Lovers paid $3,000,000 for the land. Tree Lovers will sell the lumber as it is harvested and expects to deplete it over five years (23 acres in year one, 30 acres in year two, 24 acres in year three, 10 acres in year four, and 13 acres in year five). Calculate the depletion expense for the next five years. Year 1 $ Year 2 Year 3 $ Year 4 Year 5 Prepare the journal entry for year one. If an amount box does not require an entry, leave it blank. %24 %24 %24 %24 %24
Salem Amusement Park paid $400,000 for a concession stand. Salem started out depreciating the building using the straight-line method over 20 years with a residual value of zero. After using the concession stand for four years, Salem determines that the building will remain useful for only four more years. Record Salem's depreciation on the concession stand for year five using the straight-line method. (Record debits first, then credits. Exclude explanations from any journal entries.) Date Journal Entry Accounts Debit Credit
Northwest Delivery Company acquired an adjacent lot to construct a new warehouse, paying $75,000 and giving a short-term note for $90,000. Legal fees paid were $2,500, delinquent taxes assumed were $22,400, and fees paid to remove an old building from the land were $14,500. Materials salvaged from the demolition of the building were sold for $7,500. A contractor was paid $660,000 to construct a new warehouse. Determine the Cost of the land to be reported on the balance sheet.
On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $32,000 in cash and giving a short-term note for $302,000. Legal fees paid were $1,580, delinquent taxes assumed were $15,200, and fees paid to remove an old building from the land were $19,100. Materials salvaged from the demolition of the building were sold for $5,000. A contractor was paid $1,015,400 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.fill in the blank 1 of 1$
Jacobson Company purchased a parcel of land for a new office building. The cost of the land was $310,000. An old building on the property wad demolished and construction began on the new building. All of this activity occurred within the same year. Costs included demolition ($37,000), architect fees on the new building design ($64,000), legal fees for land title investigation ($3,100), and construction ($768,000). At what amount should Jacobson Company record the cost the cost of the building? A B C D $768,000 $832,000 $869,000 $1,078,000
Cottrell incurred the following costs related to its office building. You can assume all costs were paid in cash. (You do not need to record any depreciation related to the office building.) Installed a second air conditioner because it was determined that one air conditioning unit could not sufficiently cool the building, $7,000. Repaired and painted wall damage, $800. Replaced the building roof which was estimated to have a remaining life of less than 5 years, $37,000. The new metal roof should last a minimum of 25 years. Paid property taxes, $9,000.
in the new building? 40. In January, Prahbu purchased for $90,000 a new machine for use in an existing production line of his manufacturing business. Assume that the machine is a unit of property and is not a material or supply. Prahbu pays $2,500 to install the machine, and after the machine is installed, he pays $1,300 to perform a critical test on the machine to ensure that it will operate in accordance with quality standards. On November 1, the critical test is complete, and Prahbu places the machine in service on the production line. On December 3, Prahbu pays another $3,300 to perform periodic quality control testing after the machine is placed in service. How much will Prahbu be required to capitalize as the cost of the machine? Donn 11 LO 2-1 resear
Sage Ltd. owned several manufacturing facilities. On September 15 of the current year, Sage decided to sell one of its manufacturing buildings. The building had cost $6,325,000 when originally purchased 5 years ago, and had been depreciated using the straight-line method with no residual value. Sage estimated that the building had a 25-year life when purchased. Prepare the journal entry to record the sale of the building on Sage's books, assuming 5 years of depreciation has already been recorded in the accounts to the date of disposal. The building was sold for $5,250,000 cash. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Sept. 15 List of Accounts…
In January, Prahbu purchased for $100,000 a new machine for use in an existing production line of his manufacturing business. Assume that the machine is a unit of property and is not a material or supply. Prahbu pays $4,075 to install the machine, and after the machine is installed, he pays $2,350 to perform a critical test on the machine to ensure that it will operate in accordance with quality standards. On November 1, the critical test is complete, and Prahbu places the machine in service on the production line. On December 3, Prahbu pays another $5,400 to perform periodic quality control testing after the machine is placed in service. How much will Prahbu be required to capitalize as the cost of the machine?
Bill's Wrecker Service has just completed a minor repair on a tow truck. The repair cost was $760, and the book value prior to the repair was $4,500. In addition, the company spent $6,500 to replace the roof on a building. The new roof extended the life of the building by five years. Prior to the roof replacement, the general ledger reflected the Building account at $94,000 and related Accumulated Depreciation account at $41,500. Required After the work was completed, what book value should appear on the balance sheet for the tow truck and the building? Tow Truck Building Book Value
Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate: At time of purchase, annual depreciation was ___ Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the asset’s life: Original cost Depreciation previously taken Book value at beginning of year five Salvage value Revised remaining depreciable cost Revised remaining useful life 15 years Revised annual depreciation Create the depreciation expense journal entry for year five: DR CR
Murphy Self Storage purchased land, paying $160,000 cash as a down payment and signing a $185,000 note payable for the balance. Murphy also had to pay delinquent property tax of $2,000, title insurance costing $6,000, and $11,000 to level the land and remove an unwanted building. The company paid $58,000 to add soil for the foundation and then constructed an office building at a cost of $700,000. It also paid $52,000 for a fence around the property, $11,000 for the company sign near the property entrance, and $3,000 for lighting of the grounds. Read the requirement. The cost of the land is The cost of the land improvements is The cost of the building is Requirement 1. What is the capitalized cost of each of Murphy's land, land improvements, and building? Print Done - X

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