Pane records depreciation and amortization expense. Use the nearest whole month convention, and the double declining balance
Question:
Pane records depreciation and amortization expense. Use the nearest whole month convention, and the double declining balance method for depreciation and the whole-year convention and the straight-line method for amortization. Note that all assets on the books at the beginning of the year are fully depreciated. Use the accumulated depreciation and accumulated amortization accounts. (See Transaction #1, #2, and #8).
8. On July 2, Pane pays cash for a patent that will allow it to produce a revolutionary new window for boats and other marine vehicles called "T-Panes".
Cost of Patent | $120,000 |
Estimated Economic Life (in years) | 12 |
1. On January 5, Pane buys land and a building for one lump-sum of cash.
Contract price: | $590,000 |
Fair Value: Land | $400,000 |
Fair Value: Building | $200,000 |
Useful Life of Building (years) | 20 |
2. On January 7, Pane purchases a machine to make stained glass windows. Pane pays cash for the machine. The machine has no residual value.
Contract Price: | $105,500 |
Transportation Costs: | $7,200 |
Installation Costs: | $4,956 |
Sales Tax on Contract Price: | 10% |
Useful Life of Machine (years) | 6 |