Question

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t Landscapes by Design purchased land with an office building, equipment shed, abandoned warehouse, pond with a foot bridge, parking lot and lighting for a lump-sum cost of $1,750,000. A downpayment of $495,000 was paid in cash with the balance on a long-term mortgage. The appraised values are as follows Land Pond and foot bridge Parking lot and ighting Office building Equipment shed Abandoned warehouse 275,000 265,000 185,000 ,000,000 25,000 Determine the cost to be apportioned to each item and prepare the journal entry to record the acquisition. Note:Date not necessary on journal entry AppraisedPercent Apportioned Asset Value of TotalCost Land Pond and foot bridge Parking lot and ighting Office buiding Storage shed Abandoned shed Totals 275,000 265,000 85,000 ,000,000 25,000 15% 262,500 1496 245,000 10%-175,000 %945,000 7% 122,500 0% ,850,000 100 1,750,000 Land Land Improvements Building 262,500 420,000 1,067,500 Cash Mortgage Payable 95,000 ,255,000 Landscapes by Design intends to demolish the abandoned shed and use one haltf of the space to build a small storage shed and the rest wil be used for a lot to show their unique creations. 500 Savage from sale of oldlbuildin Landscapes by Design had the folowing items that they brought from their prior location: Inventory Equipment Determine cost allocation: 35,500 228,000 Inventory & 262,500 20,000 1,067,500 228,000 35,500 uild Salvage from sale of old Level area after demolition for shed and show lot Tree and bush materials 2,500 1,250 attachment for truck our concrete for storage s Pour concrete for sidewalks in show on tree and bush of storage shed 850 16,600 s for resale to put on shOW Install perimeter fenc Emplovee wages to move invent Purchase beginning suppies for operations rom prior location 750 otals 43,600 Note: For assistance see Comerstone 7.2 7.3, 7.4,7.5 Existential Products started business in July 1, 2010 with the following purchases: Useful life Residual value Depr. Methoo Land Building Parking Lot, Lighting& Fencing Processing Equipment Office Equipment 175,000 Indefinite 890,000 40 years $66,000 15 years 189,000 10 years $70,000 5 years $175,000 Straight Line 7,800 Double Declining Balance $19,800 Units of Production 12,000 Double Declining Balance At the end of 2018, the company has come to the conclusion that the building will not last 40 years. The estimated useful life should have been 35 years with a salvage value of $124,965 What is the annual depreciation for the building for 2019? Original depreciation per year Book value 12-31-18 Depreciation for 2019 The Processing Equipment is rated to run for a total of 60,000 hours based on three shifts in ten years Prepare a depreciation schedule for land improvements, processing equipment and office equipmet Land Improvements 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Beg BV Depr Accum Depr 2024 2025 Per hour depreciation Hours used Beg BV 2,200 5,900 6,200 5,800 6,100 6,000 5,750 5,900 5,800 6,100 4,250 Depr Accum Depr 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 60,000 Office Equipment 2010 2011 2012 2013 2014 Beg BV Accum Depr

Answer 1

Asset   Appraised   Percent   Apportioned
Value   of Total   Cost
Land   275000   15%   262500
Pond and foot bridge   265000   14%   245000
Parking lot and lighting   185000   10%   175000
Office building   1000000   54%   945000
Storage shed   125000   7%   122500
Abandoned shed   0   0%   0
Total $   1850000   100%   1750000
Note: In absence of specific instructions regarding rounding off, the percent of total has been rounded off to the nearest whole number. Kindly round off as required.

Account Titles   Debit   Credit
Land   262500  
Land Improvements   420000  
Building   1067500  
Cash       495000
Mortgage Payable       1255000
Land Improvements = $245000 + $175000 = $420000

Building = $945000 + $122500 = $1067500

Description   Land   Land Improv   Building   Equipment   Expense
Beginning balance   262500   420000   1067500   228000   35500
Building permit           600      
Removal of old building   6500              
Salvage from sale of old building materials   -2500              
Level area after demolition for shed and show lot   1250              
Tree and bush spade attachment for truck               17750  
Pour concrete for storage shed floor           1750      
Pour concrete for sidewalks in show lot       1950          
Freight on tree and bush spade               850  
Cost of storage shed           16600      
Purchase plants for resale to put on show lot                   2800
Install perimeter fencing       5400          
Employee wages to move inventory from prior location                   2750
Purchase beginning supplies for operations                   2550
Totals   267750   427350   1086450   246600   43600
Note: The apportioned costs for land, land improvements, and building computed earlier have also been shown as beginning balance in order to compute the totals. Remove if not required.