Current Attempt in Progress On March 1, 2020, Bonita Group acquired real estate on which it planned to construct a small office building. The company paid €85,000 in cash. An old warehouse on the property was razed at a cost of €8,800; the salvaged materials were sold for €1,600. Additional expenditures before construction began included €1,800 attorney's fee for work concerning the land purchase, €5,200 real estate broker's fee, €7,800 architect's fee, and €14,900 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of land €
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- Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar Corporation purchased a machine for 50,000. Lapar paid shipping expenses of 500, as well as installation costs of 1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of 3,000. On January 1, 2020, Lapar made additions costing 3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. Required: 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2020? 2. Assume Lapar determines the machine has three significant components as shown below. If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded?Expenditures After Acquisition Roanoke Manufacturing placed a robotic arm on a large assembly machine on January 1, 2019. At that time, the assembly machine was expected to last another 3 years. The following information is available concerning the assembly machine. The robotic arm cost $225,000 and was expected to extend the useful life of the machine by 3 years. Therefore, the useful life of the assembly machine, after the arm replacement, is 6 years. The assembly machine is expected to have a residual value of $120,000 at the end of its useful life. Required: 1. Prepare the journal entry necessary to record the addition of the robotic arm. 2. Compute 2019 depreciation expense for the machine using the straight-line method, and prepare the necessary journal entry. 3. What is the book value of the machine at the end of 2019? 4. CONCEPTUAL CONNECTION What would have been the effect on the financial statements if Roanoke had expensed the addition of the robotic arm?On March 1, 2020, Swifty Company acquired real estate on which it planned to construct a small office building. The company paid $92,000 in cash. An old warehouse on the property was razed at a cost of $8,400; the salvaged materials were sold for $2,500. Additional expenditures before construction began included $1,100 attorney’s fee for work concerning the land purchase, $5,800 real estate broker’s fee, $7,000 architect’s fee, and $14,400 to put in driveways and a parking lot.(a)Determine the amount to be reported as the cost of the land.
- Current Attempt in Progress On March 1, 2022, Martinez Company acquired real estate on which it planned to construct a small office building, by paying $86,000 in cash. An old warehouse on the property was demolished at a cost of $9,500; the salvaged materials were sold for $3,100. Additional expenditures before construction began included $1.500 attorney's fee for work concerning the land purchase, $4,600 real estate broker's fee, $7,100 architect's fee, and $13,000 to put in driveways and a parking lot. Determine the amount to be reported as the cost of the land. Cost of land $Current Attempt in Progress On March 1, 2022, Sunland Company acquired real estate, on which it planned to construct a small office building, by paying $80,500 in cash. An old warehouse on the property was demolished at a cost of $9,700; the salvaged materials were sold for $2,600. Additional expenditures before construction began included $1,550 attorney's fee for work concerning the land purchase, $5,100 real estate broker's fee, $7,550 architect's fee, and $13,550 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of land 2$ e Textbook and Media List of Accounts Attempts: unlimited Submit Answer Save for LaterOil Products Company purchases an oil tanker depot on January 1, 2020, at a cost of $600,000. Oil Products expects to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it will cost $75,000 to dismantle the depot and remove the tanks at the end of the depot’s useful life. Instructions a. Prepare the journal entries to record the depot and the asset retirement obligation for the depot on January 1, 2020. Based on an effective-interest rate of 6%, the present value of the asset retirement obligation on January 1, 2020, is $41,879. b. Prepare any journal entries required for the depot and the asset retirement obligation at December 31, 2020. Oil Products uses straight-line depreciation; the estimated salvage value for the depot is zero. c. On December 31, 2029, Oil Products pays a demolition firm to dismantle the depot and remove the tanks at a price of $80,000. Prepare the…
- In 2017, a company acquired a silver mine for P50,000. In 2018, the company constructed a road to the silver mine costing P5,000,000. Improvements and other development costs made in 2018 cost P750,000. It is estimated that the mine can be sold for P600,000 after mining activities. During 2019, buildings were constructed near the mine to house workers at a total cost of P2,000,000. Residual value of these building amounted to P200,000. In 2020, it was estimated that 4,000,000 tons of silver ore could be removed from the mine for refining. During 2020, the first year of operations, 500,000 tons were removed from the mine, 200,000 of which remained in inventory at the end of the year. In 2021, workers mined 1,000,000 tons of silver. During that same year, geologists discovered that the mine contained 3,000,000 tons of silver ore in addition to the original 4,000,000 tons. Development costs of P1,300,000 were made in early 2021 to facilitate removal of the additional silver. In addition,…On 1 May 2020, Ron Trading purchased a new machine. The following paymentsrelate to the machine.List price $21,500Purchase discount $2,000Transportation cost $300Repair of damage parts incurred in transporting the machine $1,000Fees paid to test the machine before use $500Fees paid to the installer to install the machine $800Machine operator’s salary for the first month of operation $3,000Maintenance costs for the first month of operation $300(i) Identify and compute the cost of the machine to be recognised. Explainyour reasoning.(ii) Journalise the transactions. Assume the above payments are paid in cash.On March 1, 2017, Sunland Company acquired real estate, on which it planned to construct a small office building, by paying $84,000 in cash. An old warehouse on the property was demolished at a cost of $9,000; the salvaged materials were sold for $1,860. Additional expenditures before construction began included $1,360 attorney's fee for work concerning the land purchase, $4,900 real estate broker's fee, $8,860 architect's fee, and $14,800 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of land
- On February 1, 2020, Nelson Corporation purchased a parcel of land as a factory site for $320,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2020. Costs incurred during this period are listed below: Demolition of pold building $20,000 Arcchitects fees $35,000 Legal Fees for title investigation and purchase contract $5,000 Contruction Cost $1,390,000 Salvaged materials resulting from demolition were sold for $10,000. Nelson should record the cost of the land and new building, respectively, as A) $330,000 and $1,425,000.…DMH Industries Limited purchased a strip mine for cash on April 1, 2023 at a cost of $5,787,000. DMH expects to operate the mine for 10 years, at which it is legally required to restore the surrounding area to its original state. It is estimated that it will cost $477,000 to do this at the end of the mine's useful life. The company's year-end is December 31, and DMH follows ASPE. (a) Your Answer Correct Answer Your answer is correct. Prepare the journal entry to record the purchase of the mine and to record the asset retirement obligation for the mine on April 1, 2023. Based on the effective interest rate of 5%, the present value of the asset retirement obligation (i.e., its fair value) on the date of acquisition is $292,837. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (b) Date Account…On August 31, 2019, CAMELLIA Company purchased a new machinery for ₱540,000. The machinery has an estimated useful life of 5 years and depreciation is computed using the SYD method. Estimated salvage value of the machine is ₱60,000. Questions: What is the total accumulated depreciation on December 31, 2020? If CAMELLIA decides to change its depreciation method to straight-line at the start of 2021, what is the depreciation expense for the year ended December 31, 2021? * Present solutions.