ent CALCULATOR FULL SCREEN PRINTER VERSION 4 BACK NEXT Probl

ent CALCULATOR FULL SCREEN PRINTER VERSION 4 BACK NEXT Problem 11-10 Your answer is partially correct. Try again Bonita Corporation, a manufacturer of steel products, began operations on October 1, 2016. The accounting department of Bonita has started the fixed-asset and depreciation schedule presented below. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company\'s records and personnel. 1. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. 2. Land A and Building A were acquired from a predecessor corporation. Bonita paid $762,700 for the land and building together. At the time of acquisition, the land had an 3. Land B was acquired on October 2, 2016, in exchange for 2,700 newly issued shares of Bonita\'s common stock. At the date of acquisition, the stock had a par value of $5 per 4. Construction of Building B on the newly acquired land began on October 1, 2017, By September 30, 2018, Bonita had paid $340,000 of the estimated total construction costs of 5. Certain equipment was donated to the corporation by a local university. An independent appraisal of the equipment when donated placed the fair value at $39,600 and the 6. Machinery A\'s total cost of $188,400 includes installation expense of $560 and normal repairs and maintenance of $16,000, Salvage value is estimated at $6,600. Machinery A appraised value of $89,200, and the building had an appraised value of $802,800. share and a fair value of $28 per share. During October 2016, Bonita paid $16,100 to demolish an existing building on this land so it could construct a new building. $494,500. It is estimated that the building will be completed and occupied by July 2019. salvage value at $2,700. was sold on February 1, 2018. 7. On October 1, 2017, Machinery B was acquired with a down payment of $5,550 and the remaining payments to be made in 11 annual installments of $5,810 each beginning October 1, 2017. The prevailing interest rate was 8%. The following data were abstracted from present value tables rounded). Present value of an ordinary Present value of $1.00 at 8% 10 years 0.463 10 y 11 years 0.42911 years 15 years 0.31515 years of$1.00 at 8% 6.710 7.139 8.559 All Rights Reserved. A Division of 05 PM

Solution

Answer 7. $39600 (Fair Value)

Answer 1 = $76270 = Land A
Answer 2 = $686430 = Building A
Allocation in proportion to appraised values at date of exchange:
	Amount	% of Total
Land	$89,200	10%
Building	802,800	90%
	$892,000	100%
Land	$762700 x 10%	76270
Building	$762700 x 90%	686430
		$762,700