NP+10e+Ch09+Solutions - P9-2 Siber Computers1. Schedule of...

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Unformatted text preview: P9-2 Siber Computers1. Schedule of Assets for Training CenterLandBuildingEquipmentTotalAttorney's fee, land acquisition$35,200 $35,200 Cost of land$597,000 $597,000 Architect's fee, building design$102,000 $102,000 Building$1,025,000 $1,025,000 Parking lot & sidewalk$135,600 $135,600 Electrical wiring, building$168,000 $168,000 Landscaping$55,000 $55,000 Cost of surveying land$8,900 $8,900 Training equipment, tables and chairs$136,400 $136,400 Installation of training equipment$65,600 $65,600 Cost of grading the land$14,000 $14,000 Cost of changes in bldg to soundproof$58,700 $58,700 Administrative salary$14,400 $7,200 $43,200 $7,200 $72,000 Total cost$655,500 $211,800 $1,396,900 $209,200 $2,473,400 2. Impact on ProfitabilityThis classification of property, plant & equipment into different categories enables the company to prepare depreciationschedules based on different useful lives. For example, Land will be considered to have unlimited useful life and therefore will not be subject to depreciation, whereas buidling will probable be depreciated over 20-40 years. These different depreciation schedules will result in variations in profitability depending on the amounts assigned to each category and their respective useful lives.Land ImprovementsP9-4 Roman's Construction Company1. Annual Depreciation Schedules2. Gain or Loss After Year 3Straight-Line=($721,000 - $70,000) / 6 = $651,000 / 6 = $108,500Dep. MethodProceedsCarrying ValueGain (Loss)YearDepreciationAcc. DepreciatioCarrying ValueStraight-Line$500,000 $395,500 $104,500 $721,000 Units of Prodn$500,000 $310,870 $189,130 1$108,500 $108,500 $612,500 Dble Declining$500,000 $213,630 $286,370 2$108,500...
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NP+10e+Ch09+Solutions - P9-2 Siber Computers1. Schedule of...

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