PROBLEM 1

1
LAND
OPTION COST (EXERCISED)
PAYMENT TO SETTLEMENT AGENT
PAYMENT OF ARREARS IN RATES
PAYMENT FOR LAND

2 LAND IMPROVEMENTS
DRIVEWAY ET AL
PAYMENT FOR NEW FENCE

3 BUILDING
PAYMENT FOR DEMOLITION
SALE OF MATERIAL
PAYMENT TO ARCHITECT
BUILDING PERMIT FEES
FENCE DURING CONSTRUCTION
PAYMENT TO CONSTRUCTION CONTRACTOR
SAFETY INSPECTION
REMOVAL OF SAFETY FENCE

4 EQUIPMENT
PAYMENT FOR EQUIPMENT
FREIGHT & INSURANCE
INSTALLATION
SAFETY EQUIPMENT
ADJUSTMENTS
 1,000.00
100,000.00
50,000.00
1,000,000.00
1,151,000.00

540,000.00
80,000.00
620,000.00

120,000.00
(55,000.00)
230,000.00
120,000.00
34,000.00
2,400,000.00
30,000.00
20,000.00
2,899,000.00

640,000.00
56,000.00
120,000.00
110,000.00
33,000.00
959,000.00
PROBLEM 2

1
SALES PROCEEDS
DISMANTLING COST
NET SALES PROCEEDS
LESS: CARRYING AMOUNT
COST
ACCUMULATED DEPRECIATION (80K*10%*4)
GAIN (LOSS) ON SALE OF MACHINE NO. 3

2
LOSS ON SALE OF MACHINE
ACCUMULATED DEPRECIATION
MACHINERY

3
UNADJUSTED MACHINERY, 12/31/19
ADD (DEDUCT) ADJUSTMENTS:
ERROR IN RECORDING DISPOSAL OF MACHINE NO. 3 (80K-6K)
INSTALLATION COST OF MACHINE NO. 23
ADJUSTED MACHINERY 12/31/19

4
DEPRECIATION EXPENSE (605K*10%)

5
UNADJSUTED ACCUMULATED DEPRECIATION, 12/31/19
ADD (DEDUCT) ADJSUTMENTS:
ACCUMULATED DEPRECIATION OF MACHINE NO. 3 (80K*10%*4)
OVERSTATEMENT OF DEPRECIATION EXPENSE
SHOULD BE (605K*10%)
AS RECORDED
ADJUSTED ACCUMULATED DEPRECIATION, 12/31/19
 10,000.00
(4,000.00)
6,000.00

80,000.00
(32,000.00) 48,000.00
(42,000.00)

42,000.00
32,000.00
74,000.00

644,000.00

(74,000.00)
35,000.00 (39,000.00)
605,000.00

60,500.00

344,400.00

(32,000.00)

60,500.00
64,400.00 (3,900.00)
308,500.00
PROBLEM 3

1
ACCUMULATED DEPRECIATION (180K-3750)`
PRODUCTION MACHINE (180K-6K)
GAIN ON SALE (SEE NOTE 1)

NOTE 1
SALES PROCEEDS
LESS CARYING AMOUNT, 2/28/19
CARRYING AMOUNT, 1/1/19 (180K-168,750)
DEPRECIATION (180K*25%*2/12)
GAIN (LOSS) ON SALE OF MACHINE 1

2
ACCUMULATED DEPRECIATION (180K-60K)
LOSS ON DESTRUCTION (SEE NOTE 1)
PRODUCTION MACHINE

NOTE 1
CARRYING AMOUNT, 1/1/19 (180K-78,750)
DEPRECIATION (180K*25%*11/12)
CARRYING AMOUNT, 12/1/19 LOSS ON DESTRUCTION

3
PRODUCTION MACHINE NO. 6
ACCUMULATED DEPRECIATION (180K-82.5K)
LOSS ON EXCHANGE (SEE NOTE 1)
PRODUCTION MACHINE NO. 3

NOTE 1
TRADE-IN VALUE
LESS CARRYING AMOUNT, 9/1/19
CARRYING AMOUNT, 1/1/19 (180K-67.5K)
DEPRECIATION (180K*25%*8/12)
GAIN (LOSS) ON TRADE-IN MACHINE 3

4
DEPRECIATION (SEE NOTE 1)
5

MACHINE 1- SOLD 2/28

MACHINE 2- DESTROYED 12/1
MACHINE 3- TRADED 9/1
MACHINE 4
MACHINE 5 -ACQUIRED
MACHINE 6- ACQUIRED
MACHINE 7- ACQUIRED
176,250.00
174,000.00
2,250.00

6,000.00

11,250.00
(7,500.00) 3,750.00
2,250.00

120,000.00
60,000.00
180,000.00

101,250.00
(41,250.00)
60,000.00

24,000.00
97,500.00
58,500.00
180,000.00

24,000.00

112,500.00
(30,000.00) 82,500.00
(58,500.00)

233,250.00
ADJUSTED BALANCE DA FRACTION DEPRECIATION
- 180,000.00 2/12 7,500.00
- 180,000.00 11/12 41,250.00
- 180,000.00 8/12 30,000.00
180,000.00 180,000.00 12/12 45,000.00
396,000.00 396,000.00 10/12 82,500.00
216,000.00 216,000.00 4/12 18,000.00
432,000.00 432,000.00 1/12 9,000.00
1,224,000.00 233,250.00
ADJUSTED DEPRECIATION CARRYING AMOUNT
- -
- -
- -
90,000.00 90,000.00
82,500.00 313,500.00
18,000.00 198,000.00
9,000.00 423,000.00
199,500.00 1,024,500.00
PROBLEM 4

1 461,528.00
2 3,761,974.00
3 1,222,075.00
4 68,472.00
5 5,615,521.00

SOLUTIONS COST 12/31

LAND 275,000.00
BUILDINGS 2,800,000.00
MACHINERY & EQUIPMENT 1,380,000.00
AUTOMOBILE & TRUCKS 210,000.00
LEASEHOLD IMPROVEMENTS 432,000.00
5,097,000.00

ACCUMULATED DEPRECIATION 12/31

LAND -
BUILDINGS 672,900.00
MACHINERY & EQUIPMENT 367,500.00
AUTOMOBILE & TRUCKS 114,326.00
LEASEHOLD IMPROVEMENTS 108,000.00
1,262,726.00
ADDITION DISPOSAL 12/31 CARRYING AMOUNT

- - 275,000.00 275,000.00
1,875,000.00 - 4,675,000.00 3,761,974.00
369,000.00 17,000.00 1,732,000.00 1,222,075.00
25,000.00 48,000.00 187,000.00 68,472.00
- - 432,000.00 288,000.00
2,269,000.00 65,000.00 7,301,000.00 5,615,521.00

ADDITION DISPOSAL 12/31 CARRYING AMOUNT

- - -
240,126.00 - 913,026.00
156,450.00 14,025.00 509,925.00
28,952.00 24,750.00 118,528.00
36,000.00 - 144,000.00
461,528.00 38,775.00 1,685,479.00
PROBLEM 5

1
COST OF PLANT
COST OF PLANT HELD FOR SALE
COST OF REMAINING PLANT
ACCUMULATE DEPRECIATION OF REMAINING PLANT
COST OF PLANT AND EQUIPMENT TO BE SHOWN 12/31
DEPRECIATION CHARGED @20%
DEPRECIATION TO BE CHARGED ON PLANT HELD FOR SALE
PLANT AND EQUIPMENT

2
PLANT HELD FOR SALE
 94,500,000.00
9,000,000.00
85,500,000.00
19,500,000.00
66,000,000.00
(13,200,000.00)
(400,000.00)
52,400,000.00

4,200,000.00
PROBLEM 6

1
COST OF LAND
ESTIMATED RESTORATION COST
TOTAL COST
RESIDUAL VALUE
COST SUBJECT TO DEPLETION
DIVIDED BY TOTAL ESTIMATED RESERVES
DEPLETION PER TON
DEPLETION FOR 2018 (100K*1.25)

2
ORIGINAL COST TO BE DEPLETED
ACCUMULATED DEPRECIATION ( 180K*1.25) 1/1/19
REMAINING DA 1/1/19
2019 MINE IMPROVEMENTS
NEW COST TO DEPLETE
DIVIDED BY REMAININNG EST (400K-180K/60K)
2019 DEPLETION PER TON
DEPLETION FOR 2019 (140K*1.34)

3
FROM 1/1/19 INV. (10K*1.25)
FROM 2019 EXTRACTION (120K*1.34)
DEPLETION INCLUDED COS FOR 2019

4
COST (450K+80K+100K)
ACCUMULATED DEPRECIATION 12*31/19
ACCUMULATED DEPRECIATION 1/1/19
DEPLETION FOP 2019
CA 12/31/19
450,000.00
80,000.00
530,000.00
(30,000.00)
500,000.00
400,000.00
1.25
125,000.00

500,000.00
(225,000.00)
275,000.00
100,000.00
375,000.00
280,000.00
1.34
187,600.00

12,500.00
160,800.00
173,300.00

630,000.00

225,000.00
187,600.00 412,600.00
217,400.00
PROBLEM 7

1B
2A
3D
4D
5A
6C
7A
8A
9D
10 D