Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Question
Chapter 10, Problem 10.3E
1.
To determine
Property, Plant, and Equipment:
Property, Plant, and Equipment refers to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.
To Determine: The initial valuation of each asset which S Manufacturer acquired in these transactions.
2.
To determine
The amounts that Corporation B should capitalize as the cost of the land, if S Manufacturer demolished the old building.
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Exercise 10-3 (Algo) Acquisition costs; lump-sum acquisition [LO10-1, 10-2]
Samtech Manufacturing purchased land and a building for $4 million. In addition to the purchase price, Samtech made the following
expenditures in connection with the purchase of the land and building:
Title insurance
Legal fees for drawing the contract
Pro-rated property taxes for the period after acquisition
State transfer fees
$ 19,000
6,500
39,000
4,300
An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.7 and $1.3 million,
respectively. Shortly after acquisition, Samtech spent $85,000 to construct a parking lot and $43,000 for landscaping.
Required:
1. Determine the initial valuation of each asset Samtech acquired in these transactions.
2. Determine the initial valuation of each asset, assuming that immediately after acquisition, Samtech demolished the building.
Demolition costs were $280,000 and the salvaged materials were sold for $7,500. In…
Exercise 10-3 (Algo) Acquisition costs; lump-sum acquisition [LO10-1, 10-2]
Samtech Manufacturing purchased land and building for $3 million. In addition to the purchase price, Samtech made the following
expenditures in connection with the purchase of the land and building:
Title insurance
Legal fees for drawing the contract
Pro-rated property taxes for the period after acquisition
State transfer fees
$23,000
8,500
43,000
4,700
An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3 and $2 million, respectively.
Shortly after acquisition, Samtech spent $89,000 to construct a parking lot and $47,000 for landscaping.
Required:
1. Determine the initial valuation of each asset Samtech acquired in these transactions.
2. Determine the initial valuation of each asset, assuming that immediately after acquisition, Samtech demolished the building.
Demolition costs were $320,000 and the salvaged materials were sold for $9,500. In addition,…
BE 10-1 Acquisition cost; equipment
LO10-1
Beaverton Lumber purchased milling equipment for $35,000. In addition to the purchase price, Beaverton made the following
expenditures: freight, $1,500; installation, $3,000; testing, $2,000; personal property tax on the equipment for the first year, $500. What is
the initial cost of the equipment?
Chapter 10 Solutions
Intermediate Accounting, 10 Ed
Ch. 10 - Prob. 10.1QCh. 10 - Prob. 10.2QCh. 10 - Prob. 10.3QCh. 10 - Prob. 10.4QCh. 10 - Prob. 10.5QCh. 10 - Prob. 10.6QCh. 10 - When an asset is acquired and a note payable is...Ch. 10 - Explain how assets acquired in exchange for equity...Ch. 10 - Prob. 10.9QCh. 10 - What account is credited when a company receives...
Ch. 10 - Prob. 10.11QCh. 10 - Identify the two exceptions to valuing property,...Ch. 10 - In what situations is interest capitalized?Ch. 10 - Define average accumulated expenditures and...Ch. 10 - Explain the difference between the specific...Ch. 10 - Prob. 10.16QCh. 10 - Prob. 10.17QCh. 10 - Explain the accounting treatment of costs incurred...Ch. 10 - Explain the difference in the accounting treatment...Ch. 10 - Prob. 10.20QCh. 10 - Prob. 10.21QCh. 10 - Prob. 10.22QCh. 10 - Prob. 10.23QCh. 10 - Acquisition cost; machine LO101 Beavert on Lumber...Ch. 10 - Prob. 10.2BECh. 10 - Prob. 10.3BECh. 10 - Cost of a natural resource; asset retirement...Ch. 10 - Asset retirement obligation LO101 Refer to the...Ch. 10 - Prob. 10.6BECh. 10 - Prob. 10.8BECh. 10 - Prob. 10.11BECh. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Prob. 10.14BECh. 10 - Prob. 10.15BECh. 10 - Research and development LO108 Maxtor Technology...Ch. 10 - Prob. 10.18BECh. 10 - Prob. 10.19BECh. 10 - Research and development; various types LO108...Ch. 10 - Prob. 10.21BECh. 10 - Acquisition cost; equipment LO101 Oaktree Company...Ch. 10 - Prob. 10.3ECh. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Acquisition costs; noninterest-bearing note ...Ch. 10 - Prob. 10.11ECh. 10 - Prob. 10.14ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.16ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.18ECh. 10 - Prob. 10.19ECh. 10 - Prob. 10.20ECh. 10 - FASB codification research LO101, LO106, LO107,...Ch. 10 - Prob. 10.30ECh. 10 - Prob. 10.31ECh. 10 - Prob. 10.32ECh. 10 - Intangibles; start-up costs LO101, LO108 Freitas...Ch. 10 - Prob. 10.1PCh. 10 - Prob. 10.4PCh. 10 - Acquisition costs; journal entries LO101, LO103,...Ch. 10 - Prob. 10.6PCh. 10 - Prob. 10.8PCh. 10 - Prob. 10.9PCh. 10 - Judgment Case 101 Acquisition costs LO101, LO103,...Ch. 10 - Judgment Case 104 Interest capitalization LO107...Ch. 10 - Prob. 10.6DMPCh. 10 - Prob. 10.7DMPCh. 10 - Judgment Case 108 Research and development LO108...Ch. 10 - Prob. 10.9DMPCh. 10 - Prob. 10.11DMPCh. 10 - Prob. 10.13DMPCh. 10 - Prob. 10.15DMPCh. 10 - Prob. 10.16DMP
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