ACCT$125-$ Introductory Accounting II

Assignment #$1$

Chapter $9$

$39$ marks

Name:

Student Number:

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Caronport Carpentry Shop, to construct a new office building for themselves, purchased a tract of land with an old unsuitable building on it$.$ They plan to remove the building and make the following transactions. Prepare a schedule showing the amounts to be recorded as Land, Bulding, Equipment, and Operating Expenses. $(10$ marks$)$

$\backslash$table$[[$Purchase of machinery and equipment,$$,63,878],[$Construction costs of new building,$$,1,444,444],[$Installation of machinery and equipment,$$,7,247],[$Clearing of land for parking lot,$$,5,825],[$Installation of new roof,$$,1,443],[$Security costs of completed property,$$,3\mathrm{.}552],[$Survey of the site for the new building,$$,6,256],[$Parking lot snow removal for building occupants,$$,1,478],[$Electricity to operate machinery once installed,$$,699],[$Freight on machinery purchased,$$,1,470]]$

Caronport Carpentry Shop recently negotiated a lump$-$sum purchase of several assets from another business. They completed the purchase on June $30,2023,$ at a total cash price of $$384,299$ which included land, parking lot, landscaping, and car. The estimated fair market values of the assets were land $$284,208,$ parking lot $$22,823,$ landscaping $$83,051,$ and car $$18,747.$ The Company has a September $30$ year$-$end. Prepare a schedule to allocate the lump$-$sum purchase to separate assets. Also, prepare the general journal entry to record the transaction. $(7$ marks$)$Prince Albert Company purchased a smartphone worth $$1,178$ on September $1,2023.$ The a smartphone should have an estimated life of $4$ years or $4,800$ minutes. Residual value is estimated to be $$100.$ Calculate the depreciation expense under both the Units$-$Of$-$Production and Straight$-$Line methods for the first four years of the use of the asset. The company's fiscal year ends May $31,2024.$ Show all calculations, round dollar values to the nearest dollar $($units of production depreciation rate, round to $3$ decimals$)!(12$ marks$)$

$\backslash$table$[[$Year$,\backslash$table$[[$Usage$],[$information:$]],$Unit$],[2024,828,$minutes$],[2025,1,104,$minutes$],[2026,540,$minutes$],[2027,564,$minutes$]]$

Saskatoon Supermarket Company, who has a year$-$end date of March $31,2027,$ disposed of a truck on September $1,2026.$ The asset had a cost of $$54,267,$ an estimated residual value of $$5,400,$ an estimated useful life of $8$ years or $213,000kms,$ and accumulated depreciation at the start of the fiscal year of disposal of $$23,742.$ In the year of disposal, the company used the truck for $11,094$ kms $.$ On disposal, they received proceeds of $$23,606.$ There were no changes to any estimates, and the asset was purchased at the start of the fiscal year in which it was purchased. Answer the following questions about the disposal, calculating all answers to the nearest dollar $($unit$-$ofproduction, calculate the rate per unit to three decimal places$)$: $(10$ marks$)$

a$)$ Calculate the amount of depreciation for the truck in the final year of disposal $(2027)$ using the Double$-$Declining Balance method and provide the journal entry.

b$)$ Calculate the gain$/$loss on disposal of the truck and provide the journal entry.