Kohlbeck Corporation, a manufacturer of steel products, began operations on Octo
ID: 2711489 • Letter: K
Question
Kohlbeck Corporation, a manufacturer of steel products, began operations on October 1, 2013. The accounting department of Kohlbeck 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.
Present value
of $1.00 at 8%
Present value
of an ordinary annuity
of $1.00 at 8%
Complete the schedule below. (Round answers to 0 decimal places, e.g. 45,892.)
KOHLBECK CORPORATION
Fixed-Asset and Depreciation Schedule
For Fiscal Years Ended September 30, 2014, and September 30, 2015
Depreciation
Expense
Year Ended
September 30
Assets
Acquisition Date
Cost
Salvage
Depreciation Method
Estimated Life in Years
2014
2015
Open Show Work
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. Kohlbeck paid $808,260 for the land and building together. At the time of acquisition, the land had an appraised value of $97,990, and the building had an appraised value of $881,910. 3. Land B was acquired on October 2, 2013, in exchange for 3,300 newly issued shares of Kohlbeck’s common stock. At the date of acquisition, the stock had a par value of $6 per share and a fair value of $32 per share. During October 2013, Kohlbeck paid $18,630 to demolish an existing building on this land so it could construct a new building. 4. Construction of Building B on the newly acquired land began on October 1, 2014. By September 30, 2015, Kohlbeck had paid $327,250 of the estimated total construction costs of $459,590. It is estimated that the building will be completed and occupied by July 2016. 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 $45,300 and the salvage value at $3,720. 6. Machinery A’s total cost of $182,280 includes installation expense of $850 and normal repairs and maintenance of $14,030. Salvage value is estimated at $6,380. Machinery A was sold on February 1, 2015. 7. On October 1, 2014, Machinery B was acquired with a down payment of $6,167 and the remaining payments to be made in 11 annual installments of $6,467 each beginning October 1, 2014. The prevailing interest rate was 8%. The following data were abstracted from present value tables (rounded).Explanation / Answer
Assets
Acquisition date
Cost
Salvage
Depreciation method
Estimated life in years
Depreciation expense for 2014
Depreciation expense for 2015
Land A
1 st Oct,2013
80,826
NA
NA
NA
NA
Building A
1 st Oct,2013
727,434
42,900
Straight line
68453
68453
Land B
1 st Oct,2013
124,230
NA
NA
NA
NA
Building B
Under construction
327,250
Straight line
30
10908
10908
Donated equipment
2 nd Oct,2013
45,300
3,720
150% declining balance
10
6795
558
Machinery A
2 nd Oct,2013
182,280
6,380
Sum of the year's digits
8
21986
21986
Machinery B
1 st Oct,2013
52,335
Straight line
20
2617
2617
Assets
Acquisition date
Cost
Salvage
Depreciation method
Estimated life in years
Depreciation expense for 2014
Depreciation expense for 2015
Land A
1 st Oct,2013
80,826
NA
NA
NA
NA
Building A
1 st Oct,2013
727,434
42,900
Straight line
68453
68453
Land B
1 st Oct,2013
124,230
NA
NA
NA
NA
Building B
Under construction
327,250
Straight line
30
10908
10908
Donated equipment
2 nd Oct,2013
45,300
3,720
150% declining balance
10
6795
558
Machinery A
2 nd Oct,2013
182,280
6,380
Sum of the year's digits
8
21986
21986
Machinery B
1 st Oct,2013
52,335
Straight line
20
2617
2617
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.