Question

In: Accounting

On June 1, 2019, Turner Corporation purchased land, a building, and some equipment for $540,000. The...

On June 1, 2019, Turner Corporation purchased land, a building, and some
equipment for $540,000. The following information is available concerning
the property purchased:

                                 Current Market Value
Land .......................           142,500
Building ...................           262,200
Equipment ..................           165,300

Before the property could be used, Turner had to spend $26,000 to renovate
the building and $14,000 to put the equipment in working order.

Assume the equipment was assigned a $9,500 residual value, a 15-year life,
and was being depreciated using the straight-line depreciation method.

Calculate the book value of the equipment at December 31, 2025.

Solutions

Expert Solution

Calculation of the book value of the equipment at December 31, 2025
Year Beginning book value Addition Depreciation Ending Book Value
2019 $0 $179,300 $6,603 $172,697
2020 $172,697 $0 $11,320 $161,377
2021 $161,377 $0 $11,320 $150,057
2022 $150,057 $0 $11,320 $138,737
2023 $138,737 $0 $11,320 $127,417
2024 $127,417 $0 $11,320 $116,097
2025 $116,097 $0 $11,320 $104,777
The book value of the equipment at December 31, 2025 $104,777
Working
Depreciation on equipment per year using straight line method = (Depreciable value - residual value)/useful life
Depreciable value of equipment = Market value of equipment + cost to put it in working order = $165300 + $14000 = $179300
Depreciation on equipment per year using straight line method = ($179300 - $9500)/15 years = $11,320
Note : Depreciation for the year 2019 considered for 7 months.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

On June 1, 2019, Turner Corporation purchased land, a building, and some equipment for $540,000. The...
On June 1, 2019, Turner Corporation purchased land, a building, and some equipment for $540,000. The following information is available concerning the property purchased:                                  Current Market Value Land .......................           142,500 Building ...................           262,200 Equipment ..................           165,300 Before the property could be used, Turner had to spend $26,000 to renovate the building and $14,000 to put the equipment in working order. Assume the equipment was assigned a $9,500 residual value, a 15-year life, and was being depreciated using the straight-line...
On June 1, 2016, XYZ Company paid $375,000 to purchase land, a building, and some equipment....
On June 1, 2016, XYZ Company paid $375,000 to purchase land, a building, and some equipment. The market value of these assets on that date were: land $68,000; building $220,000; equipment $112,000. The equipment was assigned a useful life of 15 years and a $6,000 residual value. The equipment will be depreciated using the straight-line method. On November 30, 2023, XYZ Company sold the equipment for $39,300 cash. Calculate the amount of the loss recorded on the sale of the...
On June 1, 2016, XYZ Company paid $375,000 to purchase land, a building, and some equipment....
On June 1, 2016, XYZ Company paid $375,000 to purchase land, a building, and some equipment. The market value of these assets on that date were: land $68,000; building $220,000; equipment $112,000. The equipment was assigned a useful life of 15 years and a $6,000 residual value. The equipment will be depreciated using the straight-line method. On November 30, 2023, XYZ Company sold the equipment for $39,300 cash. Calculate the amount of the loss recorded on the sale of the...
On January 1, 2019, Pronghorn Corporation purchased a building to use as its factory, and some...
On January 1, 2019, Pronghorn Corporation purchased a building to use as its factory, and some equipment to manufacture its product. The following information was determined at the time of purchase: Cost Useful Life Residual Value Depreciation Building $2,550,000 20 years $510,000 Double Declining Equipment $1,060,000 25 years $106,000 Straight-Line On January 1, 2022, Pronghorn decided to change the depreciation method for the building to the straight-line method, as a result of a change in the pattern of benefits received....
Wildhorse Company purchased land and a building on April 1, 2019, for $369,600. The company paid...
Wildhorse Company purchased land and a building on April 1, 2019, for $369,600. The company paid $110,400 in cash and signed a 5% note payable for the balance. At that time, it was estimated that the land was worth $145,000 and the building, $224,600. The building was estimated to have a 25-year useful life with a $35,000 residual value. The company has a December 31 year end, prepares adjusting entries annually, and uses the straight-line method for buildings; depreciation is...
6. On January 1, 2019, Ginger Company purchased land and a building for a total cash...
6. On January 1, 2019, Ginger Company purchased land and a building for a total cash price of $6,900,000. Individually, the land was appraised at $2,250,000 and the building at $5,250,000. The buildings estimated useful life is 25 years and its estimated salvage value is $300,000. Required: a. Prepare the journal entry to record the purchase of land and building on January 1, 2019. b. What is the 2019 depreciation expense on the building, assuming that double declining-balance depreciation is...
1. Victoria Corporation entered into the following transactions: Purchased a tract of land with existing building...
1. Victoria Corporation entered into the following transactions: Purchased a tract of land with existing building in exchange for 100,000 shares of Victoria with P40 par value that had a market price of P65 per share on the date of acquisition. The last property tax bill indicates assessed value of P3,890,000 for the land and P450,000 for the building. Razed the building at a cost of P275,000 to make way for a new building to be constructed later that year....
in its first year of business, atc company purchased land, a building, and a equipment on...
in its first year of business, atc company purchased land, a building, and a equipment on november 20 2016 for november 700000 in total. The land was valued 338000 and building at 262000 and the equipment at 150000. Additional information on the depreicable asset follows: Assest Residual Value Useful life in years Depriciation Method Building 15,000 60months residual value Straight line Equipment 15,000 8months residual value Double diminishing balance Instructions: a. Allocate the purchase cost of the land, building and...
A sole proprietorship purchased an office building in June of 2019 that cost $800,000. Assume the...
A sole proprietorship purchased an office building in June of 2019 that cost $800,000. Assume the taxpayer wants to maximize current year depreciation and thus wants to utilize 100% bonus depreciation where applicable. What is the total amount of depreciation the taxpayer can take for the building in 2019?
Hoover Corporation purchased equipment on January 1, 2019, for $610,000. In 2019 and 2020, Hoover depreciated...
Hoover Corporation purchased equipment on January 1, 2019, for $610,000. In 2019 and 2020, Hoover depreciated the asset on a straight-line basis with an estimated useful life of 8 years and a $10,000 residual valie. In 2021, due to changes in technology, Hoover revised the useful life to a total of four years with no residual value. What depreciation would Hoover record for the year 2021 on this equipment? a) $98,641 b) 230,000 c)100,000 d)72,000
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT