Question

The Thompson Corporation, a manufacturer of steel products, began operations on October 1, 2019. The accounting department of Thompson has started the fixed-asset and depreciation schedule presented below. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

1. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition.
2. Land A and Building A were acquired from a predecessor corporation. Thompson paid $772,500 for the land and building together. At the time of acquisition, the land had a fair value of $103,200 and the building had a fair value of $756,800.
3. Land B was acquired on October 2, 2019, in exchange for 2,600 newly issued shares of Thompson’s common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $21 per share. During October 2019, Thompson paid $10,000 to demolish an existing building on this land so it could construct a new building.
4. Construction of Building B on the newly acquired land began on October 1, 2020. By September 30, 2021, Thompson had paid $170,000 of the estimated total construction costs of $260,000. Estimated completion and occupancy are July 2022.
5. Certain equipment was donated to the corporation by the city. An independent appraisal of the equipment when donated placed the fair value at $14,400 and the residual value at $1,600.
6. Equipment A’s total cost of $102,000 includes installation charges of $510 and normal repairs and maintenance of $10,600. Residual value is estimated at $5,000. Equipment A was sold on February 1, 2021.
7. On October 1, 2020, Equipment B was acquired with a down payment of $3,600 and the remaining payments to be made in 10 annual installments of $3,600 each beginning October 1, 2021. The prevailing interest rate was 7%.

Required:
Supply the correct amount for each answer box on the schedule. (Round your intermediate calculations and final answers to the nearest whole dollar.)

THOMPSON CORPORATION

Fixed Asset and Depreciation Schedule

For Fiscal Years Ended September 30, 2020, and September 30, 2021

Assets

Acquisition Date

Cost

Residual

Depreciation Method

Estimated Life in Years

Depreciation for Year Ended 9/30

2020

2021

Land A

10/1/2019

$92,700selected answer correct

N/A

not applicable

N/A

N/A

N/A

Building A

10/1/2019

679,800selected answer correct

$40,600

Straight-line

47selected answer correct

$13,600

$13,600selected answer correct

Land B

10/2/2019

64,600selected answer correct

N/A

not applicable

N/A

N/A

N/A

Building B

Under construction

170,000 to date

—

Straight-line

30

—

0selected answer correct

Donated Equipment

10/2/2019

14,400selected answer correct

1,600

200% Declining balance

10

2,880selected answer correct

2,304selected answer correct

Equipment A

10/2/2019

91,400selected answer correct

5,000

Sum-of-the years’-digits

9

17,280selected answer correct

15,362selected answer incorrect

Equipment B

10/1/2020

36,000selected answer incorrect

—

Straight-line

16

—

Answer 1

Fixed Asset Depreciatio Schedule
Assets	Acquisition Date	Cost	Residual	Depreciation Method	Estimated Life in Years	Depreciation for Year Ended 9/30
						2020	2021
Land A	10-01-2019	92700	N/A	not applicable	N/A	N/A	N/A
Building A	10-01-2019	679800	40600	Straight-line	47	13600	13600
Land B	10-02-2019	64600	N/A	not applicable	N/A	N/A	N/A
		(2600*21)+10000
Building B	Under construction	170000	—	Straight-line	30	—
Donated Equipment	10-02-2019	14400	1600	200% Declining balance	10	2880	2304
Equipment A	10-02-2019	91400	5000	Sum-of-the years’-digits	9	17280	15360
		(102000-10600)				(91400-5000)*9/45	(91400-5000)*8/45
Equipment B	10-01-2002	28885	-	SL	16	-	1805
							(28885/16)
working
Cost allocation between Land A and Building A
	Fair value F	Ratio F/Total *100	Allocation	Cost allocated
Land A	103200	12	772500	92700
Building	756800	88	772500	679800
Total	860000
No. of years (679800-40600)/13600	47
Donated equipment
Depreciation expenses
DDB rate 1/10*200%	20%
2020=14400*20%	2880
2021=(14400-2880)*20%	2304
Eqipment B
We need to take present Value
We will take present value of annuity due of $1
n=11 (1 now+10 installments ), I =7%
PAVD table
3600*8.02358	28885
If any doubt please comment