D Bowers week 8 HW.xlsx

D Bowers week 8 HW.xlsx - E7-14 Determining the Cost of an...

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E7-14 Determining the Cost of an Asset Omar Corporation paid $200,000 for a tract of land that had an old gas station on it. The gas station was demolished at a cost of $20,000 and a new warehouse was construc In addition, several other costs were incurred: Legal fees (associated with the purchase of the land) $35,000 Architect fees (associated with the new warehouse) $42,000 Interest on the construction loan (for the new warehouse) $18,000 (1) What value should be assigned to the tract of land? 235,000 (2) What value should be assigned to the new warehouse? 630,000 3.) Why did you include not included the cost in calculating the values assigned to the tw They are part of the acquisition cost of these assets. E7-17 Computing Depreciation Expense Equipment costing $290,000, with an expected scrap value of $30,000 and an estimated Calculate the depreciation expense for years 2012 to 2016 using: (a) the straight-line m Cost of Equipment $ 290,000 Salvage Value $ 30,000 5 year depreciation schedule Straight-line depreciation 2012 52,000 2013 52,000 2014 52,000 2015 52,000 2016 52,000 Double Declining depreciation [2/5 = 40%] 2012 104,000 2013 104,000
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