Question

PLEASE HELP!

Determining Cost of Land On-Time Delivery Company acquired an adiacent lot to construct a new warehouse, paying $30,000 in cash and giving a short-term nate for $289.000. Legal fees paid were $1,765, delinquent taxes assumed were $10,700, and fees paid to remove an old building from the land were $17,800. Materials salvaged from the demolition of the building were sold for $4,800. A contractor was paid $969,800 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet. Depreciation by Two Methods A Kubota tractor acquired on January 8 at a cost of $297,000 has an estimated useful life of 10 years. Assuming that it will have no residual value. a. Determine the depreciation for each of the first two years by the straight-line method. First Year Second Year b. Determine the depreciation for each of the first two years by the double-declining balance method. Do not round the double-declining balance rate. If required, round your final answers to the nearest dollar. First Year Second Year Partial-Year Depreciation Equipment acquired at a cost of $80,000 has an estimated residual value of $5,000 and an estimated useful life of 10 years. It was placed in service on April 1 of the current fiscal year, which ends on December 31. If necessary, round your answers to the nearest cent. a. Determine the depreciation for the current fiscal year and for the following fiscal year by the straight-line method. Depreciation Year 1 s Year 2 s b. Determine the depreciation for the current fiscal year and for the following fiscal year by the double-declining-balance method. Depreciation Year 1

Answer 1

1) Determine the cost of the land to be reported on the balance sheet.
Initial cost of land ($30,000 + $289,000)	$ 319,000.00
Add:
Legal Fees	$     1,765.00
Delinquent taxes	$   10,700.00
Demolition of building	$   17,800.00
Less: Salvage of materials	$   (4,800.00)
Cost of Land	$ 344,465.00
2) Depreciation by Two Methods A Kubota tractor acquired on January 8 at a cost of $297,000 has an estimated useful life of 10 years. Assuming that it will have no residual value a. Determine the depreciation for each of the first two years by the straight-line method. First Year Second Year b. Determine the depreciation for each of the first two years by the double-declining-balance method
2)
Straight-line method.
Straight-line Rate = 1/10	10.00%
	Year 1	Year 2
Depreciation expense = ($297000 - $0) x 10%	29700	29700
Double-declining-balance method
Double-declining-rate = 2 x 10%	20.00%
Depreciation expense = ($297000 x 20%)	$   59,400.00
Depreciation expense = ($297,000 - $59,400) x 20%	$   47,520.00
3)
Straight-line method.
Straight-line Rate = 1/10	10.00%
	Year 1	Year 2
Depreciation expense = ($80000 - $5,000) x 10% x 9/12	$     5,625.00	$  7,500.00
Depreciation expense = ($80000 - $5,000) x 10%
Double-declining-balance method
Double-declining-rate = 2 x 10%	20.00%
Depreciation expense = ($80000 x 20%) x 9/12	$   12,000.00
Depreciation expense = ($80,000 -12000) x 20%	$   13,600.00