(Comprehensive Depreciation Computations) Sheryl Crow Corporation, a manufacturer of
steel products, began operations on October 1, 2006. The accounting department of Crow has started the fixed-asset and depreciation schedule presented on page 563. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel.
1. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition.
2. Land A and Building A were acquired from a predecessor corporation. Crow paid $820,000 for the land and building together. At the time of acquisition, the land had an appraised value of $90,000, and the building had an appraised value of $810,000.
3. Land B was acquired on October 2, 2006, in exchange for 2,500 newly issued shares of Crow's common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $30 per share. During October 2006, Crow paid $16,000 to demolish an existing building on this land so it could construct a new building.
4. Construction of Building B on the newly acquired land began on October 1, 2007. By September 30, 2008, Crow had paid $320,000 of the estimated total construction costs of $450,000. It is estimated that the building will be completed and occupied by July 2009.
5. Certain equipment was donated to the corporation by a local university. An independent appraisal of the equipment when donated placed the fair market value at $30,000 and the salvage value at $3,000.
See attachment for rest of problem.
Please see the attached file.
(1) $82,000 Allocated in proportion to appraised values
Total amount paid is 820,000. The total of appraised value is 900,000. The amount allocated to land is 90,000/900,000X820,000 = 82,000
(2) $738,000 Allocated in proportion to appraised values
Amount allocated = 810,000/900,000 X 820,000= 738,000
(3) Forty years Cost less salvage ($738,000 - $40,000) divided by
annual depreciation ($17,450).
(4) $17,450 Same as prior year since it is straight-line depreciation and the ...
The solution explains how to determine in the missing amounts in the given schedule