Reference no: EM132316214
Question
Completing the following questions from a (non-graded) chapter assignment. Any help you could provide with solving the following problems below would assist with my understanding.
February 1, 2018, Salisbury Company purchased land for the future factory location at a cost of $117,000. The dilapidated building that was on the property was demolished so that construction could begin on the new factory building. The new factory was completed on November 1, 2018. Costs incurred during this period were:
Item Amount
Demolition dilapidated building $2,600
Architect Fees $11,250
Legal Fees - for title search $1,250
Interest During Active Construction Period $5,025
Real estate transfer tax $1,425
Construction Costs $605,000
Using this information, how much should be recorded as the cost of the land?
On January 1, 2017, Frostburg Company purchased for $68,500, equipment having a service life of six years and an estimated residual value of $4,000. Frostburg has recorded depreciation of the equipment using the straight-line method.
On December 31, 2019, before making any annual adjusting entries, the equipment was exchanged for new machinery having a fair value of $35,000. The transaction has commercial substance. Use this information for all General Journal entries (without explanation) required to record the events for December 31, 2019.
Bowie Company uses a calendar year. On December 31, 2018, after adjusting entries were posted, Bowie Company sold a machine which was originally purchased on January 1, 2015. The historical cost was $24,000, the salvage value assumed was $1,000 and the original estimated life was five years. It was sold for $4,600 cash. Using this information, how much should be recorded on December 31 for the Gain or (Loss)? Round to whole dollars.