PROBLEMS: SET C
Taffler Company was organized on January 1. During the first year of operations, the
following plant asset expenditures and receipts were recorded in random order.
Accrued real estate taxes paid at time of purchase of real estate
Real estate taxes on land paid for the current year
Full payment to building contractor
Excavation costs for new building
Cost of real estate purchased as a plant site (land $100,000 and building
Cost of parking lots and driveways
Architect’s fees on building plans
Installation cost of fences around property
Cost of demolishing building to make land suitable for construction of new
Proceeds from salvage of demolished building
Analyze the foregoing tranactions using the following column headings. Insert the number of
each transaction in the Item space, and insert the amounts in the appropriate columns. For
amounts entered in the Other Accounts column, also indicate the account title.
In recent years, Francisco Company purchased three machines. Because of heavy
turnover in the accounting department, a different accountant was in charge of selecting the de-
preciation method for each machine, and various methods were selected. Information concern-
ing the machines is summarized on the next page.
For the declining-balance method, the company uses the double-declining rate. For the units-of-
activity method, total machine hours are expected to be 24,000. Actual hours of use in the first
3 years were: 2010, 1,000; 2011, 4,500; and 2012, 5,000.
Compute the amount of accumulated depreciation on each machine at December 31, 2010.
If machine 2 had been purchased on April 1 instead of January 1, what would be the depre-
ciation expense for this machine in (1) 2008 and (2) 2009?
On January 1, 2010, Arlo Company purchased the following two machines for use in
its production process.
Machine A: The cash price of this machine was $46,500. Related expenditures included: sales
tax $2,200, shipping costs $175, insurance during shipping $75, installation and
testing costs $50, and $90 of oil and lubricants to be used with the machinery dur-
ing its first year of operation.Arlo estimates that the useful life of the machine is