{"id":22966,"date":"2021-12-16T08:28:40","date_gmt":"2021-12-16T08:28:40","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/p10-4-lo146-groupwork-dispositions-including-condemnation\/"},"modified":"2021-12-16T08:28:40","modified_gmt":"2021-12-16T08:28:40","slug":"p10-4-lo146-groupwork-dispositions-including-condemnation","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/p10-4-lo146-groupwork-dispositions-including-condemnation\/","title":{"rendered":"P10-4 (lo1,4,6) groupwork (dispositions, including condemnation,"},"content":{"rendered":"
\n

P10-4<\/span><\/strong>\u00a0<\/span>(LO1,4,6)<\/span><\/strong>\u00a0<\/span>GROUPWORK<\/span><\/strong>\u00a0(Dispositions, Including Condemnation, Demolition, and Trade-In)<\/span><\/strong>\u00a0Presented below is a schedule of property dispositions for Hollerith Co.<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n
\n

Schedule of Property Dispositions<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

\u00a0<\/span><\/p>\n<\/td>\n

\n

Cost<\/span><\/span><\/p>\n<\/td>\n

\n

Accumulated Depreciation<\/span><\/span><\/p>\n<\/td>\n

\n

Cash Proceeds<\/span><\/span><\/p>\n<\/td>\n

\n

Fair Value<\/span><\/span><\/p>\n<\/td>\n

\n

Nature of Disposition<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<\/thead>\n

\n

Land<\/span><\/p>\n<\/td>\n

\n

$40,000<\/span><\/p>\n<\/td>\n

\n

\u2014<\/span><\/p>\n<\/td>\n

\n

$31,000<\/span><\/p>\n<\/td>\n

\n

$31,000<\/span><\/p>\n<\/td>\n

\n

Condemnation<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Building<\/span><\/p>\n<\/td>\n

\n

15,000<\/span><\/p>\n<\/td>\n

\n

\u2014<\/span><\/p>\n<\/td>\n

\n

3,600\u2002\u2002<\/span><\/p>\n<\/td>\n

\n

\u2014<\/span><\/p>\n<\/td>\n

\n

Demolition<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Warehouse<\/span><\/p>\n<\/td>\n

\n

70,000<\/span><\/p>\n<\/td>\n

\n

$16,000<\/span><\/p>\n<\/td>\n

\n

74,000\u2002<\/span><\/p>\n<\/td>\n

\n

74,000\u2002<\/span><\/p>\n<\/td>\n

\n

Destruction by fire<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Machine<\/span><\/p>\n<\/td>\n

\n

8,000<\/span><\/p>\n<\/td>\n

\n

2,800\u2002\u2002<\/span><\/p>\n<\/td>\n

\n

900\u2002\u2002\u2002\u2002<\/span><\/p>\n<\/td>\n

\n

7,200\u2002\u2002<\/span><\/p>\n<\/td>\n

\n

Trade-in<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Furniture<\/span><\/p>\n<\/td>\n

\n

10,000<\/span><\/p>\n<\/td>\n

\n

7,850\u2002\u2002<\/span><\/p>\n<\/td>\n

\n

\u2014<\/span><\/p>\n<\/td>\n

\n

3,100\u2002\u2002<\/span><\/p>\n<\/td>\n

\n

Contribution<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Automobile<\/span><\/p>\n<\/td>\n

\n

9,000<\/span><\/p>\n<\/td>\n

\n

3,460\u2002\u2002<\/span><\/p>\n<\/td>\n

\n

2,960\u2002\u2002<\/span><\/p>\n<\/td>\n

\n

2,960\u2002\u2002<\/span><\/p>\n<\/td>\n

\n

Sale<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The following additional information is available.<\/span><\/p>\n

Land:<\/span><\/strong>\u00a0On February 15, a condemnation award was received as consideration for unimproved land held primarily as an investment, and on March 31, another parcel of unimproved land to be held as an investment was purchased at a cost of $35,000.<\/span><\/p>\n

Building:<\/span><\/strong>\u00a0On April 2, land and building were purchased at a total cost of $75,000, of which 20% was allocated to the building on the corporate books. The real estate was acquired with the intention of demolishing the building, and this was accomplished during the month of November. Cash proceeds received in November represent the net proceeds from demolition of the building.<\/span><\/p>\n

Warehouse:<\/span><\/strong>\u00a0On June 30, the warehouse was destroyed by fire. The warehouse was purchased January 2, 2014, and had depreciated $16,000. On December 27, the insurance proceeds and other funds were used to purchase a replacement warehouse at a cost of $90,000.<\/span><\/p>\n

Machine:<\/span><\/strong>\u00a0On December 26, the machine was exchanged for another machine having a fair value of $6,300 and cash of $900 was received. (The exchange lacks commercial substance.)<\/span><\/p>\n

Furniture:<\/span><\/strong>\u00a0On August 15, furniture was contributed to a qualified charitable organization. No other contributions were made or pledged during the year.<\/span><\/p>\n

Automobile:<\/span><\/strong>\u00a0On November 3, the automobile was sold to Jared Winger, a stockholder.<\/span><\/p>\n

Instructions<\/span><\/strong><\/p>\n

Indicate how these items would be reported on the income statement of Hollerith Co.<\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u00a0<\/span><\/p>\n

P10-6<\/span><\/strong>\u00a0<\/span>(LO1,3)<\/span><\/strong>\u00a0<\/span>(Interest During Construction)<\/span><\/strong>\u00a0Grieg Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $139,000 in cash. In addition, it paid $2,000 in surveying costs and $4,000 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,000, with $1,000 being received from the sale of materials.<\/span><\/p>\n

Architectural plans were also formalized on December 1, 2017, when the architect was paid $30,000. The necessary building permits costing $3,000 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2018 as follows.<\/span><\/p>\n\n\n\n\n\n\n\n
\n

Date of Payment<\/span><\/span><\/p>\n<\/td>\n

\n

Amount of Payment<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<\/thead>\n

\n

March 1<\/span><\/p>\n<\/td>\n

\n

$240,000<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

May 1<\/span><\/p>\n<\/td>\n

\n

330,000\u2002<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

July 1<\/span><\/p>\n<\/td>\n

\n

60,000\u2002\u2002<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The building was completed on July 1, 2018.<\/span><\/p>\n

To finance construction of this plant, Grieg borrowed $600,000 from the bank on December 1, 2017. Grieg had no other borrowings. The $600,000 was a 10-year loan bearing interest at 8%.<\/span><\/p>\n

Instructions<\/span><\/strong><\/p>\n

Compute the balance in each of the following accounts at December 31, 2017, and December 31, 2018. (Round amounts to the nearest dollar.)<\/span><\/p>\n

(a)<\/span><\/strong>Land.<\/span><\/p>\n

(b)<\/span><\/strong>Buildings.<\/span><\/p>\n

(c)<\/span><\/strong>Interest Expense.<\/span><\/p>\n

\u00a0<\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

P10-4\u00a0(LO1,4,6)\u00a0GROUPWORK\u00a0(Dispositions, Including Condemnation, Demolition, and Trade-In)\u00a0Presented below is a schedule of property dispositions for Hollerith Co. Schedule of Property Dispositions \u00a0 Cost Accumulated Depreciation Cash Proceeds Fair Value Nature of Disposition Land $40,000 \u2014 $31,000 $31,000 Condemnation Building 15,000 \u2014 3,600\u2002\u2002 \u2014 Demolition Warehouse 70,000 $16,000 74,000\u2002 74,000\u2002 Destruction by fire Machine 8,000 2,800\u2002\u2002 900\u2002\u2002\u2002\u2002 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-22966","post","type-post","status-publish","format-standard","hentry","category-homework-help"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/22966","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=22966"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/22966\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=22966"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=22966"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=22966"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}