Question

On June 1, 2019, Turner Corporation purchased land, a building, and some equipment for $540,000. The...

On June 1, 2019, Turner Corporation purchased land, a building, and some
equipment for $540,000. The following information is available concerning
the property purchased:

                                 Current Market Value
  Land .......................           142,500
  Building ...................           262,200
  Equipment ..................           165,300

Before the property could be used, Turner had to spend $26,000 to renovate
the building and $14,000 to put the equipment in working order.

Assume the equipment was assigned a $9,500 residual value, a 15-year life,
and was being depreciated using the straight-line depreciation method.

Calculate the book value of the equipment at December 31, 2025.
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Market Value Ratio to assign Cost incurred Book Value
Land $142,500 0.25 $135,000 $0 $135,000
Building $262,200 0.46 $248,400 $26,000 $274,400
Equipment $165,300 0.29 $156,600 $14,000 $170,600
$570,000 $540,000 $40,000 $580,000
Deprecation per year for equipment ($170,600 - $9,500)/15 = $10,740
Year Depreciation Acc. Dep Book Value
2019 5370 5370 $165,230
2020 10740 16110 $154,490
2021 10740 26850 $143,750
2022 10740 37590 $133,010
2023 10740 48330 $122,270
2024 10740 59070 $111,530
2025 10740 69810 $100,790
book value of the equipment at December 31, 2025 = $100,790
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On June 1, 2019, Turner Corporation purchased land, a building, and some equipment for $540,000. The...
On June 1, 2019, Turner Corporation purchased land, a building, and some equipment for $540,000. The following information is available concerning the property purchased: Current Market Value Land ....................... 142,500 Building ................... 262,200 Equipment .................. 165,300 Before the property could be used, Turner had to spend $26,000 to renovate the building and $14,000 to put the equipment in working order. Assume the equipment was assigned a $9,500 residual value, a 15-year life, and was being depreciated using the straight-line depreciation...
On April 1, 2020, Renfro Corporation purchased land, a building, and some equipment for $633,000. The...
On April 1, 2020, Renfro Corporation purchased land, a building, and some equipment for $633,000. The following information is available concerning the property purchased: Current Market Value Land ....................... 150,420 Building ................... 366,240 Equipment .................. ? Before the property could be used, Renfro had to spend $25,320 to renovate the building and $7,140 to put the equipment in working order. The cost that was assigned to the building totaled $379,800. Calculate the cost assigned to the equipment.
Manning Company purchased a factory for $120,000. The factory included land, a building, and equipment. The...
Manning Company purchased a factory for $120,000. The factory included land, a building, and equipment. The land contributes 40.8%, the building contributes 49.6%, and the equipment contributes 9.6% of the factory’s value. How much of the cost should be assigned to the building?
Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $1,900,000....
Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $1,900,000. Harding paid $525,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $555,000; Building, $1,650,000 and Equipment, $1,095,000. (Round percentages to two decimal places: ie .054 = 5%). Assume that Harding uses the units-of-production method when depreciating its equipment. Harding estimates that the purchased equipment will produce 1,100,000 units over its 5-year...
Nanki Corporation purchased equipment on January 1, 2019, for $647,000. In 2019 and 2020, Nanki depreciated...
Nanki Corporation purchased equipment on January 1, 2019, for $647,000. In 2019 and 2020, Nanki depreciated the asset on a straight-line basis with an estimated useful life of eight years and a $15,000 residual value. In 2021, due to changes in technology, Nanki revised the useful life to a total of four years with no residual value. What depreciation would Nanki record for the year 2021 on this equipment?
June 30, 2020    A building that Big Company had purchased on January 1, 2016, for $...
June 30, 2020    A building that Big Company had purchased on January 1, 2016, for $ 10,000 was exchanged for another building owned by Other Company. Big Company exchanged its building and $1,000 cash for Other Company’s building. Big’s building had a fair value of $ 9,500 at the time of the exchange. Straight-line depreciation on the building with a 40-year useful life and no R.V. has been properly charged from Jan. 1, 2016 through Dec. 31, 2019. Both parcels...
On January 1, 2019, ABC Company purchased a new piece of equipment. The equipment was assigned...
On January 1, 2019, ABC Company purchased a new piece of equipment. The equipment was assigned a $7,000 residual value and is expected to produce a total of 60,000 units over its life. The depreciation expense reported on the equipment for 2019 was $10,734. During 2020, the equipment was used to produce 9,000 units. At December 31, 2020, the book value of the equipment was $57,466. ABC Company is using the units-of-production depreciation method to depreciate the equipment. Calculate the...
On January 1, 2019, Romero Company purchased equipment for $320,000. The equipment was assigned an $18,000...
On January 1, 2019, Romero Company purchased equipment for $320,000. The equipment was assigned an $18,000 residual value and a 16-year life. Romero Company will use the straight-line method to depreciate the equipment. On January 1, 2027, Romero Company spent $41,000 to overhaul the equipment. This capital expenditure resulted in Romero Company changing the life of the equipment from 16 years to 30 years and adjusting the residual value to be $17,500 at the end of the 30 years. Calculate...
On January 1, 2019, Romero Company purchased equipment for $320,000. The equipment was assigned an $18,000...
On January 1, 2019, Romero Company purchased equipment for $320,000. The equipment was assigned an $18,000 residual value and a 16-year life. Romero Company will use the straight-line method to depreciate the equipment. On January 1, 2026, Romero Company spent $41,000 to overhaul the equipment. This capital expenditure resulted in Romero Company changing the life of the equipment from 16 years to 30 years and adjusting the residual value to be $7,500 at the end of the 30 years. Calculate...
Aaron Rodgers purchased an apartment building on August 1, 2019, for a total of $1.75 million...
Aaron Rodgers purchased an apartment building on August 1, 2019, for a total of $1.75 million of which $525,000 was the value of the land on which the apartment building was located. Also, Aaron purchased 5-year class new business equipment for $32,750 on October 11, 2019. He elects not to immediately expense the equipment under §179 and elects not to take the additional first-year depreciation. Aaron purchased no other business assets during 2019. Determine Aaron’s depreciation on the apartment building...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT