On January 1, ProTech Co. pays a lump-sum amount of $1,550,000 for land, Building A, Building B,
Question:
On January 1, ProTech Co. pays a lump-sum amount of $1,550,000 for land, Building A, Building B, and Land Improvements B. Building A has no value and will be demolished. Building B will be an office and is appraised at $482,800, with a useful life of 15 years and a $99,500 salvage value. Land Improvements B is valued at $142,000 and is expected to last another five years with no salvage value. The land is valued at $795,200. The company also incurs the following additional costs.
Required
1. Prepare a table with the following column headings: Land, Building B, Building C, Land Improvements B, and Land Improvements C. Allocate the costs incurred by ProTech to the appropriate columns and total each column.
2. Prepare a single journal entry to record all incurred costs assuming they are paid in cash on January 1.
3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were in use.
Step by Step Answer:
Financial Accounting Information For Decisions
ISBN: 9781260705584
10th Edition
Authors: John J. Wild