ACC 305 Week 5 Assignment Problems

Nov 13
The following changes have been made
Pb 11-5
Cost Normal
repairs Install
charges Appraised
value Residual
Land A 92,000
Building A 800,000
Land A & Building A 850,000
Land B
Building B
Donated equip - Fair value 17,000 2,000
Machine A 116,000 550 15,000 7000
Machine B

Pb 11-7
Changed
Numbers

Cost of mine 1700000
Development cost 700000
Est total tons 450000
Revised est tons 525000

Problem 11-5
(1)
Allocation in proportion to appraised values at date of exchange:
% of
Amount Total
Land $92000 0.11
Building 800,000 0.89 
$892,000 100

This percentage is multiplied times the cost.

Land 850,000 $ 93500
Building

(2) $756,500

(3) $756,500-47500 =50years

14000annual depreciation

(4) $ 14000

(5) $ ? shares x $ per share =
Plus demolition of old building

(6) none 0

(7) $ Fair value.

(8) $ 

(9) $ 

(10) $

(11) $ 

(12) $ 

(13) $ PVAD = $(7.71008 * ) 
* Present value of an annuity due of $1: n = 11, i = 8% (from Table 6)

(14) $ $

years

Problem 11-7

See Illustration 11-6 for example to compute revised depreciation, page 577, see salvage value and how to compute. (You need to follow the correct steps to compute properly. i.e. review the example or you will get it wrong).
Requirement 1
Cost of mineral mine:

Purchase price $1700000
Development costs
$700000
2,400000
Depletion:

2,400000-100,000
Depletion per ton = = $ 3.1 per ton
tons450000

2011 depletion = 50,000x3.1 =155,000
2012 depletion:
Revised depletion rate = (2400000 - 155,000) 100,000 
= $ 4.5
tons525000-500000 

2012 depletion = 4.51x 80000= 360,800

Depreciation:

Structures:
$150000
Depreciation per ton = = .333 per ton
tons450000

2011 depreciation = .333x50000=$16,650

2012 depreciation:
Revised depreciation rate = 150,000-16,650 
= $. 28
tons 525000- 50,000 

2012 depreciation = .28x80,000=$22,400 
Problem 11-7 (continued)

Equipment:
$ 
Depreciation per ton = = $. per ton
tons

2011 depreciation = 
2012 depreciation:
Revised depreciation rate = 
= $. 
tons

2012 depreciation = 
Requirement 2
Mineral mine:
Cost $ 
Less accumulated depletion:
2011 depletion
2012 depletion
Book value, 12/31/12 $

Structures:
Cost $
Less accumulated depreciation:
2011 depreciation $
2012 depreciation
Book value, 12/31/12 $

Equipment:
Cost
Less accumulated depreciation:
2011 depreciation $
2012 depreciation
Book value, 12/31/12 $