On July 1, 2014, Park and Kim, Ltd. purchased a factory, including factory building, land, machine, and fixtures, for $825,000. Park and Kim hired an appraiser to provide the appraisal value for each asset: building $600,000, land $120,000, machine $420,000 and fixtures $60,000. To prepare the factory for use in production, Park and Kim spent $21,250 to renovate the factory building and $5,250 to overhaul the machine. The following table shows the estimates and the method of depreciation for each of the assets:

The machine was used 2,000 hours in 2014 and 3,000 hours in 2015.
Park and Kim had several transactions related to maintaining and upgrading the assets. On April 15, 2015, Park and Kim spent $1,200 to repair the fixtures, and on January 5, 2016, Park and Kim spent $49,500 to overhaul the engine. As a result, the total remaining machine hours were estimated at 21,000 hours. The machine was used 2,400 hours in 2016. On January 2, 2017, Park and Kim sold the factory for $785,000.
Requirements
1. Apportion the cost of the factory on the basis of the appraisal value. Show your calculations.
2. Calculate the depreciation expense for each asset for 2014, 2015, and 2016:

3. Record all journal entries for 2014, 2015, and 2016. Park and Kim€™s year-end is December 31.
4. Record the sale of the factory on January 2, 2017.

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Life 15 years Method Residual Value S13,750 10,000 6,250 Building Straight-Line Machine Fixtures Unit-of-Production 20,000 hours Double-Declining 5 years Building Machine Fixtures 2014 2015 2016 Total