P In its first year of business, Solinger Company purchased land, a building, and equipment on November

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P In its first year of business, Solinger Company purchased land, a building, and equipment on November 5, 2023, for $700,000 in total. The land was valued at $262,500, the building at $337,500, and the equipment at $150,000. Additional information on the depreciable assets follows:


Instructions 

a. Allocate the purchase cost of the land, building, and equipment to each of the assets. 

b. Solinger has a December 31 fiscal year end and is trying to decide how to calculate depreciation for assets purchased during the year. Calculate depreciation expense for the building and equipment for 2023 and 2024 assuming: 

1. Depreciation is calculated to the nearest month. 

2. A half year’s depreciation is recorded in the year of acquisition. 

c. Which policy should Solinger follow in the year of acquisition: recording depreciation to the nearest month or recording a half year of depreciation?  

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Related Book For  book-img-for-question

Accounting Principles Volume 2

ISBN: 9781119786634

9th Canadian Edition

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

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