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Logan Corporation, a manufacturer of steel products, began operations on October 1, 2018. You have been asked to complete this schedule. In addition to determining that the data already on the schedule are correct, you have obtained the following information from Logan’s records and personnel: 1. Depreciation expense 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 together for a lump-sum price of $812,500. At the time of acquisition, the land had an appraised value of $72,000, and the building had an appraised value of $828,000. 3. Land B was acquired on October 3, 2018, in exchange for 3,000 newly issued shares of Logan’s common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $25 per share. During October 2018, Logan paid $10,400 to demolish an existing building on this land so that it could construct a new building. 4. Construction of Building B on the newly acquired land began on October 2, 2019. By September 30, 2020, Logan had paid $210,000 of the estimated total construction costs of $300,000. Estimated completion and occupancy are July 2021. 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 $16,000 and the salvage at $2,000. 6. Machinery A’s total cost of $110,000 includes installation expense of $550 and normal repairs and maintenance of $11,000. Salvage value is estimated at $5,500. Machinery A was sold on February 1, 2020. 7. On October 1, 2019, Machinery B was acquired with a down payment of $4,000 and the remaining payments to be made in 10 annual installments of $4,000 each beginning October 1, 2020. The prevailing interest rate was 10%. The data that follow were abstracted from present value tables: Required: For each numbered blank in the schedule, supply the correct amount. Round each answer to the nearest dollar. Show supporting computations in good form.

BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

Solutions

Chapter
Section
Chapter 11, Problem 15P
Textbook Problem

Logan Corporation, a manufacturer of steel products, began operations on October 1, 2018.

Chapter 11, Problem 15P, Logan Corporation, a manufacturer of steel products, began operations on October 1, 2018. You have , example  1

You have been asked to complete this schedule. In addition to determining that the data already on the schedule are correct, you have obtained the following information from Logan’s records and personnel:

  1. 1. Depreciation expense is computed from the first of the month of acquisition to the first of the month of disposition.
  2. 2. Land A and Building A were acquired together for a lump-sum price of $812,500. At the time of acquisition, the land had an appraised value of $72,000, and the building had an appraised value of $828,000.
  3. 3. Land B was acquired on October 3, 2018, in exchange for 3,000 newly issued shares of Logan’s common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $25 per share. During October 2018, Logan paid $10,400 to demolish an existing building on this land so that it could construct a new building.
  4. 4. Construction of Building B on the newly acquired land began on October 2, 2019. By September 30, 2020, Logan had paid $210,000 of the estimated total construction costs of $300,000. Estimated completion and occupancy are July 2021.
  5. 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 $16,000 and the salvage at $2,000.
  6. 6. Machinery A’s total cost of $110,000 includes installation expense of $550 and normal repairs and maintenance of $11,000. Salvage value is estimated at $5,500. Machinery A was sold on February 1, 2020.
  7. 7. On October 1, 2019, Machinery B was acquired with a down payment of $4,000 and the remaining payments to be made in 10 annual installments of $4,000 each beginning October 1, 2020. The prevailing interest rate was 10%. The data that follow were abstracted from present value tables:Chapter 11, Problem 15P, Logan Corporation, a manufacturer of steel products, began operations on October 1, 2018. You have , example  2

Required:

For each numbered blank in the schedule, supply the correct amount. Round each answer to the nearest dollar. Show supporting computations in good form.

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Chapter 11 Solutions

Intermediate Accounting: Reporting And Analysis
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