Demo_for_Chapter_8 - Chapter 8 Demo Problems Question #1...

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Chapter 8 Demo Problems- Question #1 Diversified Industries started as a residential construction company. In  recent   years,   it   has   expanded   into   heavy   construction,   ready-mix  concrete, sand and gravel, construction supplies, and earth-moving  services. The company completed the following transactions during  2003. Amounts have been simplified. 2003   Jan. 1 The management decided to buy a 10-year-old building for  $175,000 and the land on which it was situated for $130,000. It  paid $100,000 in cash and signed a mortgage note payable for  the rest. Jan.  12 Paid $38,000 in renovation costs on the building prior to use. June  19 Bought a third location for a gravel pit (designated Gravel Pit  No. 3) for $50,000 cash. It was estimated that 100,000 cubic  yards of gravel could be removed. July  10 Paid $1,200 for ordinary repairs on the building. Aug. 1 Paid  $10,000  for  costs  of  preparing  the new  gravel  pit  for  exploitation. Dec.  31 Year-end adjustments:
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a. The building will be depreciated on a straight-line basis over an  estimated useful life of 30 years. The estimated residual value is  $33,000. b. During 2003, 12,000 cubic yards of gravel were removed from  Gravel Pit No. 3. c.
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Demo_for_Chapter_8 - Chapter 8 Demo Problems Question #1...

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