In: Accounting
P11.16 Sung Corporation, a manufacturer of steel products, began operations on October 1, 2019. Sung's accounting department has begun to prepare the capital asset and depreciation schedule that follows. You have been asked to assist in completing this schedule. In addition to determining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel:
PV of $1 at 8% | PV of an Ordinary Annuity of $1 at 8% | |||||
10 years | 0.463 | 10 years | 6.710 | |||
11 years | 0.429 | 11 years | 7.139 | |||
15 years | 0.315 | 15 years | 8.559 |
Sung Corporation Capital Asset and Depreciation Schedule For Fiscal Years Ended September 30, 2020, and September 30, 2021 |
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Assets | Acquisition Date |
Cost | Residual Value |
Depreciation Method |
Estimated Life in Years |
Depreciation Expense, Year Ended September 30 |
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2020 | 2021 | |||||||||||||
Land A | Oct. 1, 2019 | $ (1) | N/A | N/A | N/A | N/A | N/A | |||||||
Building A | Oct. 1, 2019 | (2) | $40,000 | Straight-line | (3) | $17,450 | (4) | |||||||
Land B | Oct. 2, 2019 | (5) | N/A | N/A | N/A | N/A | N/A | |||||||
Building B | Under construction |
$320,000 to date |
— | Straight-line | 30 | — | (6) | |||||||
Donated Equipment | Oct. 2, 2019 | (7) | 3,000 | 150% declining- balance |
10 | (8) | (9) | |||||||
Machine A | Oct. 2, 2019 | (10) | 6,000 | Double-declining- balance |
8 | (11) | (12) | |||||||
Machine B | Oct. 1, 2020 | (13) | — | Straight-line | 20 | — | (14) | |||||||
N/A = Not applicable |
Instructions
a. For each numbered item in the schedule, give the correct amount. Round each answer to the nearest dollar.
b. When would it be appropriate for management to use different depreciation policies as they have done for Machines A and B?