On July 16, 20Y1, Wyatt Corp. purchased 40 acres of land for $350,000. The land has been held for a future plant site until the current date, December 31, 20Y9. On December 18, 20Y9, TexoPete Inc. purchased 40 acres of land for $2,000,000 to be used for a distribution center. The TexoPete land is located next to the Wyatt Corp. land. Thus, both Wyatt Corp. and TexoPete Inc. own nearly identical pieces of land.1. What are the valuations of land on the balance sheets of Wyatt Corp. and TexoPete Inc. using generally accepted accounting principles?2. How might fair value accounting aid comparability when evaluating these two companies?

Central Purchasing Ltd. (CPL) owns the building it uses; it had an original cost of $8,096,000 and accumulated depreciation of $2,428,800 as of 1 January 20X2. On this date, the building (but not the land) was sold to a real estate Investment trust (REIT) for $7,596,000, which also was the building's fair value, and simultaneously leased back to CPL. The lease has a 15-year term and required payments on 31 December of each year. The payments are $646,000 with no transfer of title or purchase option. CPL will pay all of the building's operating and maintenance costs including property taxes and insurance. CPL's Incremental borrowing rate is 9%. The building is being depreciated straight-line with a full year's depreciation in the year of acquisition. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare entries for CPL to record the sale and leaseback of the building. (If no entry is required for a transaction/event, select "No…

Sheridan Corporation owns and manages a small 10-store shopping centre, which it classifies as an investment property. Sheridan has a May 31 year end and initially recognized the property at its acquisition cost of $11.2 million on June 2, 2022. The acquisition cost consisted of the purchase price of $105 million, costs to survey and transfer the property of $460,000, and legal fees to acquire the property of $240,000. Sheridan determines that approximately 26% of the shopping centre's value is attributable to the land, with the remainder attributable to the building. The following fair values are determined: Date May 31, 2023 May 31, 2024 Fair Value $10,700,000 $10,594,000 May 31, 2025 $11,208,000 Sheridan expects the shopping centre building to have a 35-year useful life and a residual value of $1.428 million. Sheridan uses the straight-line method for depreciation.

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 $ 29,000 6,500 49,000 5,300 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 $95,000 to construct a parking lot and $53,000 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 $380,000 and the salvaged materials were sold for $7,500. In addition, Samtech spent $92,000 clearing and grading the land in preparation for the…