Question

The Thompson Corporation, a manufacturer of steel products, began operations on October 1, 2019. The accounting department of Thompson has started the fixed-asset and depreciation schedule presented below. 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: (FV of $1, PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) a. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. b. Land A and Building A were acquired from a predecessor corporation. Thompson paid $842,500 for the land and building together. At the time of acquisition, the land had a fair value of $74,400 and the building had a fair value of $855.600. c. Land B was acquired on October 2, 2019, in exchange for 3,300 newly issued shares of Thompson's common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $28 per share. During October 2019, Thompson paid $10,700 to demolish an existing building on this land so it could construct a new building. d. Construction of Building B on the newly acquired land began on October 1, 2020. By September 30, 2021, Thompson had paid $240,000 of the estimated total construction costs of $330,000. Estimated completion and occupancy are July 2022. e. Certain equipment was donated to the corporation by the city. An independent appraisal of the equipment when donated placed the fair value at $17,200 and the residual value at $2,300. f. Equipment A's total cost of $110,000 includes installation charges of $580 and normal repairs and maintenance of $9,600. Residual value is estimated at $5,900. Equipment A was sold on February 1, 2021. g. On October 1, 2020, Equipment B was acquired with a down payment of $4,300 and the remaining payments to be made in 10 annual installments of $4,300 each beginning October 1, 2021. The prevailing interest rate was 8%. Required: Supply the correct amount for each answer box on the schedule. (Round your intermediate calculations and final answers to the nearest whole dollar.) THOMPSON CORPORATION Fixed Asset and Depreciation Schedule Fixed A For Fiscal Years Ended September 30, 2020, and September 30, 2021 Acquisition Date Assets Depreciation for Year Ended 9/30 Cost Depreciation Method Residual Estimated Life in Years | $ Land A Building A Land B Building B Donated Equipment Equipment A Equipment B 10/1/2019 10/1/2019 10/2/2019 Under construction 10/2/2019 10/2/2019 10/1/2020 NA 60.100 NA - 2,300 5,900 2020 2021 N/A N/A N/A | $ 14,300 NANA NA 30 - 10 | not applicable Straight-line not applicable Straight-line 200% Declining balance Sum-of-the years'-digits Straight-line 240,000 to date 15

Answer 1

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Working for Event b
	Appraised Value	Ratio	Allocated Value $842,500*% Ratio	Part No
Land A	$                                               74,400	8%	$                                                                       67,400	1
Building A	$                                             855,600	92%	$                                                                     775,100	2
Total	$                                             930,000	100%	$                                                                     842,500
Salvage Value of Building A	$                                               60,100	Given
Depreciable Value	$                                             715,000	a
Depreciation for 2020	$                                               14,300	b
Life	$                                                       50	a/b		3
Depreciation for 2021	$                                               14,300		Since SLM, will be same for every year	4
Working for Event c
Cost of Land B
(No of Share* Fair Value)	3,300*$28	$                 92,400
add: Demolition Cost		$                 10,700
Cost of Land B		$               103,100		5
Working for Event d
Depreciation for 2019 and 2020 will be NIL as usages is yet to commence				6
Working for Event e
Cost of donated equipment	Fair value	$                 17,200		7
Depreciation for 2019	(17,200*10%)*200%	$                    3,440		8
Depreciation for 2020	(17,200-3,440)*10%*200%	$                    2,752		9
Working for Event f
Cost of Machine A	$110,000-$9,600	$               100,400		10
Depreciation for 2019	($100,400-$5,900)*9/45	$                 18,900		11
(Life 8 Year, Sum of 1to9=45)
Depreciation for 2020	($100,400-$5,900)*8/45*4/12	5,600		12
(4 Month as sold in Feb)
Working for Event g
Cost of Machine B:
Down Payment		$                    4,300
PV of 3000 (PV 8%, 10 Year)	$4,300*6.71008	$                 28,853
Cost of Machine B		$                 33,153		13
Depreciation 2020	$32,094/15 Years	$                    2,210		14
Working (Since installment is started at beginning of the year	8%
1	0.92593
2	0.85734
3	0.79383
4	0.73503
5	0.68058
6	0.63017
7	0.58349
8	0.54027
9	0.50025
10	0.46319
Total	6.71008
Thompson Corporation
Assets	Acquisition Date	Cost	Residual Value	Dep Method	Life	Dep 2019	Dep 2020
Land A	10/1/19	$                 67,400	NA	NA	NA	NA	NA
Building A	10/1/19	$               775,100	$                                                                       60,100	SL	50	$   14,300	$   14,300
Land B	10/2/19	$               103,100	NA	NA	NA	NA	NA
Building B	Under Construction	240000 Tilld date	$                                                                                 -	SL	30	$            -	$            -
Donated Equipment	10/2/19	$                 17,200	$                                                                          2,300	200% Dec	10	$     3,440	$     2,752
Machine A	10/2/19	$               100,400	$                                                                          5,900	Sum of Year	9	$   18,900	$     5,600
Machine b	10/1/20	$                 33,153		SL	15	$            -	$     2,210