to allocate office building

Carrying Amount Allocation New CA

T 45,000,000.00 9,000,000.00 54,000,000.00
M 67,500,000.00 13,500,000.00 81,000,000.00
112,500,000.00 22,500,000.00

to allocate impairment loss

New CA VIU Impairment Loss
T 54,000,000.00 40,500,000.00 13,500,000.00
M 81,000,000.00 85,500,000.00 No impairment loss

January 1, 2017

to solve for annual depreciation

Cost 8,000,000.00
Multiply by 10%
Annual Depreciation 800,000.00

December 31, 2021

to solve for carrying amount on this date

Cost 8,000,000.00
Accumulated Depreciation
800,000 x 5 4,000,000.00
CA, 12/31/21 4,000,000.00

to solve for impairment loss

CA, 12/31/21 4,000,000.00
Disposal Cost 200,000.00
Impairment Loss 4,200,000.00

January 1, 2019
DDB RATE COST DEPRECIATION
2019 25% 9,600,000.00 2,400,000.00
2020 25% 7,200,000.00 1,800,000.00 work back from here

1
Depreciable PPE

removal of old building to make room... 50,000.00

payment to tenants for vacating... 15,000.00
architect fee 200,000.00
building permit 30,000.00
excavation before new construction 100,000.00
new building constructed 6,000,000.00
driveways and walk... per blueprint 60,000.00
temporary quarters for construction crew 80,000.00
temporary building to house tools and mats 60,000.00
cost of changes during construction to make new building
more energy efficient 50,000.00

TOTAL 6,645,000.00

January 1, 2019

to solve for annual depreciation

2019 8 36 4,000,000.00
2020 7 36 3,500,000.00

January 1, 2021

to solve for carrying amount on this date

Cost 20,000,000.00
Accumulated Depreciation
4M + 3.5M 7,500,000.00
CA, 12/31/21 12,500,000.00

2
to solve for new annual depreciation after revision

2021 4 10 4,680,000.00

to solve for accumulated depreciation on 12/31/21

2019 4,000,000.00
2020 3,500,000.00
2021 4,680,000.00
Accumulated Depreciation, 12/31/21 12,180,000.00

2021

Cost 10,000,000.00
New purchase 5,000,000.00
Equipment Sold (2,000,000.00)
Total Equipment 13,000,000.00
Multiply by composite rate 25%
Depreciation expense for 2021 3,250,000.00

January 1, 2019
DDB for first 2 years
DDB RATE COST DEPRECIATION
2019 40% 10,000,000.00 4,000,000.00
2020 40% 6,000,000.00 2,400,000.00

January 1, 2021
to solve for CA on this date

Cost 10,000,000.00
Accumulated Depreciation
4M + 2.4M 6,400,000.00
CA, 1/1/21 3,600,000.00

to solve for new annual dep after revision

CA, 1/1/21 3,600,000.00

Remaining useful life 3
Annual depreciation 1,200,000.00

3
 to solve for AD on December 31, 2021
2019 4,000,000.00
2020 2,400,000.00
2021 1,200,000.00
Accumulated depreciation 7,600,000.00

Land as investment property Building

Purchase price of land and old building 4,000,000.00
Fair value of old building (300,000.00)
Demolition of old building 200,000.00
Proceeds from sale of salvaged mats (20,000.00)
Legal fees... 150,000.00
Title guarantee insurance 50,000.00
Payment of property taxes in arrears on land 100,000.00
Special assessment for city improvements 120,000.00
TOTAL 4,300,000.00 0

January 1, 2018
RATE YEAR REVALUATION APPRECIATION
Cost 12,000,000.00 100% 10 19,200,000.00 7,200,000.00
AD 4,800,000.00 40% 4 7,680,000.00 2,880,000.00
CA 7,200,000.00 60% 6 11,520,000.00 4,320,000.00

to solve for piecemeal realization to solve for annual depreciation

RS 4,320,000.00 RA 11,520,000.00
Remaining life 6.00 Remaining life 6.00
Piecemeal 720,000.00 Depreciation 1,920,000.00

to solve for CA on 1/1/21

RA, 1/1/18 11,520,000.00
Accumulated Depreciation
1.92M x 3 5,760,000.00
CA, 1/1/21 5,760,000.00

4
 to solve for CA on 12/31/21
FV 2,520,000.00
Depreciation
2.52M/3 840,000.00
CA, 12/31/21 1,680,000.00

December 31,2020

Cost 20,000,000.00 CA, 12/31/20 16,000,000.00

AD RA 12,000,000.00
20M/10 x 2 4,000,000.00 IL 4,000,000.00
CA 16,000,000.00

to solve for CA on 12/31/21

RA 12,000,000.00 CA 10,500,000.00
AD 1,500,000.00 RA 14,000,000.00
CA 10,500,000.00 GAIN 3,500,000.00

if no IL occured
Cost 20,000,000.00
AD 6,000,000.00
CA, 12/31/21 14,000,000.00

December 31, 2021

RATE YEAR REVALUATION APPRECIATION
COST 7,500,000.00 100% 10.00 10,500,000.00 3,000,000.00
AD 2,625,000.00 35% 3.50 3,675,000.00 1,050,000.00
2,250,000.00
375,000.00
CA 4,875,000.00 65% 6.50 6,825,000.00 1,950,000.00

depreciation for 2021

Cost 7,500,000.00
Useful life 10.00
Depreciation 750,000.00

5
December 31, 2020
Cost 22,000,000.00 CA 19,800,000.00
AD 2,200,000.00 RA 17,100,000.00
CA 19,800,000.00 IL 2,700,000.00

December 31, 2021

RA,2020 17,100,000.00 CA 15,200,000.00
AD 1,900,000.00 RA 16,800,000.00
CA 15,200,000.00 GAIN 1,600,000.00

if no IL occurred to solve for depreciation in 2022

Cost 22,000,000.00 RA, 2021 16,800,000.00

AD 4,400,000.00 Remaining life 8.00
CA 17,600,000.00 Depreciation 2,100,000.00

Total Carrying Amount 166,500,000.00

VIU 135,000,000.00
Impairment Loss 31,500,000.00
Goodwill 13,500,000.00
IL to be allocated 18,000,000.00

to allocate IL journal entry to record IL

CA IL
Inventory 31,500,000.00 5,040,000.00 Impairment Loss 18,000,000.00
PPE 81,000,000.00 12,960,000.00 AD-PPE 12,960,000.00
112,500,000.00 18,000,000.00 Inventory 5,040,000.00

6
January 1, 2019 January 1, 2021

Building 10,500,000.00 AD 100,000.00

Cash 10,500,000.00 Loss 2,400,000.00
Old roof 2,500,000.00
2019-2020
New roof 3,000,000.00
Depreciation 200,000.00 Cash 3,000,000.00
AD 200,000.00

to solve for depreciation in 2021 to solve for CA 12/31/21

Building 10,500,000.00 CA, 1/1/21 10,700,000.00

Old roof (2,500,000.00) Depreciation 212,500.00
New roof 3,000,000.00 11,000,000.00 CA,12/31/21 10,487,500.00

AD 400,000.00
(100,000.00) 300,000.00
CA, 1/1/21 10,700,000.00
RV 500,000.00
Depreciable amount 10,200,000.00
Remaining life 48.00
Depreciation 212,500.00

July 1, 2021
Land REVALUATION APPRECIATION
Cost 12,500,000.00 16,250,000.00 3,750,000.00

Building RATE YEAR REVALUATION APPRECIATION

COST 112,500,000.00 100% 15.00 150,000,000.00 37,500,000.00
AD 22,500,000.00 20% 3.00 30,000,000.00 7,500,000.00
18,750,000.00
3,750,000.00
CA 90,000,000.00 80% 12.00 120,000,000.00 30,000,000.00

7
to solve for CA of building on 12/31/21

RA 120,000,000.00
Depreciation 5,000,000.00
CA, 12/31/21 115,000,000.00

April 1, 2019

2019 5 15 6,000,000 1,500,000

2020 5 15 6,000,000 500,000
4 15 6,000,000 1,200,000
2021 4 15 6,000,000 400,000
3 15 6,000,000 900,000
Total AD 4,500,000

to solve for CA 12/31/21

Cost 6,000,000.00
AD 4,500,000.00
CA 1,500,000.00

Total CA 32,000,000.00
VIU 22,000,000.00
IL 10,000,000.00

to allocate IL
CA INITIAL ALLOC INITIAL CA REALLOC FINAL ALLOC
Building 16,000,000.00 5,000,000.00 11,000,000.00 (2,000,000.00) 3,000,000.00
Equipment 8,000,000.00 2,500,000.00 5,500,000.00 1,000,000.00 3,500,000.00
Inventory 8,000,000.00 2,500,000.00 5,500,000.00 1,000,000.00 3,500,000.00
32,000,000.00 10,000,000.00

to solve for final CA after IL

CA FINAL ALLOC FINAL CA
Building 16,000,000.00 3,000,000.00 13,000,000.00
Equipment 8,000,000.00 3,500,000.00 4,500,000.00
Inventory 8,000,000.00 3,500,000.00 4,500,000.00

8
January 1, 2021

to solve for CA in 1/1/21

Cost 14,400,000.00
AD 5,760,000.00
CA,2021 8,640,000.00

to solve for depreciation after revision

2021 7 28 10,080,000.00 2,520,000.00

Beginning Inventory 51,600.00

Purchases 368,000.00
Freight in 3,800.00
Purchase returns (11,200.00)
Purchase discounts (5,800.00)
CGAS 406,400.00
COGS 344,640.00
Ending inventory 61,760.00
Purchases in transit (2,000.00)
Goods salvaged (2,940.00)
Inventory lost in fire 56,820.00

CP WITHOUT TRADE IN 64,000.00

CP WITH TRADE IN 33,000.00
TIV 31,000.00

TIV 31,000.00
CASH PAID 33,000.00
COST OF ASSET 64,000.00

CA OF ASSET GIVEN 32,000.00

TIV 31,000.00
GAIN 1,000.00

9
January 1, 2020

2020 50% 12,000,000.00 6,000,000.00

to solve for CA 12/31/20

Cost 12,000,000.00
Depreciation 6,000,000.00
CA, 2020 6,000,000.00

January 1, 2021

2021 100% 6,000,000.00 6,000,000.00

to solve for depreciation on 2021

Initial depreciation 6,000,000.00

RV 1,200,000.00
Final depreciation 4,800,000.00

January 1,2021

Downpayment 400,000.00 Cost of Asset 1,400,000.00

Note Payable 1,000,000.00 Cash Price 1,160,000.00
Cost of asset 1,400,000.00 DNP 240,000.00

YEAR NP DNP CURRENT NONCURRENT

12/31/21 1,000,000.00 80,000.00 NP 200,000.00 400,000.00
12/31/22 800,000.00 64,000.00 DNP 48,000.00 48,000.00
12/31/23 600,000.00 48,000.00 TOTAL 152,000.00 352,000.00
12/31/24 400,000.00 32,000.00
12/31/25 200,000.00 16,000.00
3,000,000.00 240,000.00

10
 Land Building Land Improvements equipment
3,500,000.00 6,000,000.00 900,000.00 1,500,000.00
1,250,000.00 3,000,000.00 750,000.00 3,000,000.00
1,500,000.00 50,000.00
350,000.00
(500,000.00)

6,250,000.00 9,000,000.00 1,650,000.00 4,400,000.00

allocation of land and building

Land 1,200,000.00 1,500,000.00

Building 2,400,000.00 3,000,000.00
3,600,000.00 4,500,000.00

January 1,2019
RATE YEAR REVALUATION APPRECIATION
COST 20,000,000.00 100% 40.00 24,000,000.00 4,000,000.00
AD 500,000.00 2.50% 1.00 600,000.00 100,000.00
CA 19,500,000.00 97.50% 39.00 23,400,000.00 3,900,000.00

11
January 1,2021
RATE YEAR REVALUATION APPRECIATION
COST 24,000,000.00 100% 40.00 30,000,000.00 6,000,000.00
AD 1,800,000.00 7.50% 3.00 2,250,000.00 450,000.00
CA 22,200,000.00 92.50% 37.00 27,750,000.00 5,550,000.00

to solve for RS in financial statement in 12/31/21

RS, 1/1/19 3,900,000.00

Piecemeal 200,000.00
RS, 1/1/21 3,700,000.00
Revalued RS 5,550,000.00
New RS 9,250,000.00
Piecemeal
9.25M/37 250,000.00
RS, 12/31/21 9,000,000.00

Building 9,000,000.00 to solve for CA after subsequent depreciation

Cash 9,000,000.00 Building 9,000,000.00
AD (1,800,000.00)
Depreciation 360,000.00 CA, after 5 years 7,200,000.00
AD 360,000.00

AD 400,000.00 Debited AD 400,000.00

Loss 1,600,000.00 Replaced building (2,000,000.00)
Building 2,000,000.00 New replaced building 2,500,000.00
New CA after replacement 8,100,000.00
Building 2,500,000.00
Cash 2,500,000.00 Subsequent depreciation
8.1M/20 405,000.00
CA 7,695,000.00

12
 June 30,2021
Land REVALUATION APPRECIATION
Cost 3,000,000.00 4,000,000.00 1,000,000.00

Building RATE YEAR REVALUATION APPRECIATION

COST 30,000,000.00 100% 20.00 50,000,000.00 20,000,000.00
AD 4,500,000.00 15% 3.00 7,500,000.00 3,000,000.00
3,750,000.00
750,000.00
CA 25,500,000.00 85% 17.00 42,500,000.00 17,000,000.00

Machinery RATE YEAR REVALUATION APPRECIATION

COST 40,000,000.00 100% 10.00 65,000,000.00 25,000,000.00
AD 12,000,000.00 30% 3.00 19,500,000.00 7,500,000.00
10,000,000.00
2,000,000.00
CA 28,000,000.00 70% 7.00 45,500,000.00 17,500,000.00

to solve for depreciation 2021 to solve for RS 12/31/21

Building Building 17,000,000.00

Jan 1-June 30 750,000.00 Piecemeal
July 1-dec 31 17M/17 x 6/12 500,000.00
42.5M/17 x 6/12 1,250,000.00 Building RS 16,500,000.00
Total depreciation of building 2,000,000.00
Machinery 17,500,000.00
Machinery Piecemeal
Jan 1-June 30 2,000,000.00 17.5M/7 x 6/12 1,250,000.00
July 1-dec 31 MachineryRS 16,250,000.00
45.5M/7 x 6/12 3,250,000.00
Total depreciation of Machinery 5,250,000.00 Land 1,000,000.00
Building RS 16,500,000.00
Total depreciation of building 2,000,000.00 Machinery RS 16,250,000.00
Total depreciation of Machinery 5,250,000.00 RS 12/31/21 33,750,000.00
Depreciation for 2021 7,250,000.00

Land
Purchase price of land and old building 2,400,000.00
Legal fee for title investigation 15,000.00
Title insurance 10,000.00
Special assessment by city for public improvement 30,000.00

2,455,000.00

13
Building
Cost of tearing down old building 240,000.00
Proceeds from sale of old building materials (20,000.00)
Architect fee 125,000.00
Liability insurance during construction 25,000.00
Excavation cost 40,000.00
Amount paid to building contractor 8,800,000.00
Capitalizable interest incurred during contruction 300,000.00
9,510,000.00

Year Rate Revaluation Appreciation

COST 29,250,000.00 12.00 100% 41,400,000.00 12,150,000.00
RV 900,000.00 900,000.00
DA 28,350,000.00 40,500,000.00
AD 4,500,000.00 2.00 16.67% 6,750,000.00 2,250,000.00
CA 23,850,000.00 10.00 83.33% 33,750,000.00 9,900,000.00

Subsequent depreciation

Revalued Amount 33,750,000.00

Remaining life 10
Depreciation expense 3,375,000.00

2019 10 55 3,300,000.00 600,000.00

2020 9 55 3,300,000.00 540,000.00
2021 8 55 3,300,000.00 480,000.00

Cost
3.3M + 100K 3,400,000.00
AD 1,620,000.00
CA, 12/31/21 1,780,000.00

14
January 1,2021
Land REVALUATION APPRECIATION
Cost 12,500,000.00 17,500,000.00 5,000,000.00

RATE YEAR REVALUATION APPRECIATION

COST 75,000,000.00 100% 20.00 112,500,000.00 37,500,000.00
AD 22,500,000.00 30.00% 6.00 33,750,000.00 11,250,000.00
CA 52,500,000.00 70.00% 14.00 78,750,000.00 26,250,000.00

CA of building 12/31/22 RS, 12/31/22

CA, 1/1/21 78,750,000.00 RS, 1/1/21 31,250,000.00

AD Piecemeal
78.75M/14 x 2 11,250,000.00 26.25/14 x 2 3,750,000.00
CA, 12/31/22 67,500,000.00 RS, 12/31/22 27,500,000.00

Transaction 1
Invoice price 6,000,000.00
Cash discount 600,000.00
Total cost 5,400,000.00

Transaction 2
Cash Price 9,400,000.00

15
Transaction 3
Downpayment 0.00
PV of note 3,170,000.00
Total cost 3,170,000.00

Transaction 4
Downpayment 0.00
PV of note 2,732,000.00
Total cost 2,732,000.00

Total cost of machinery 20,702,000.00

FV, 12/31/20 3,750,000.00

Remaining life 3.00
Depreciation for 2021 1,250,000.00

January 1, 2020

Cost 7,520,000.00 CA, 12/31/20 5,640,000.00

AD 1,880,000.00 RA 6,000,000.00
CA, 12/31/20 5,640,000.00 no IL

December 31, 2021

CA, 12/31/20 5,640,000.00 CA, 12/31/20 3,760,000.00

AD 1,880,000.00 RA 3,560,000.00
CA, 12/31/21 3,760,000.00 IL 200,000.00

December 31, 2022

CA 3,560,000.00
AD 1,780,000.00
CA, 12/31/22 1,780,000.00

16
January 1, 2020
RATE YEAR REVALUATION APPRECIATION
COST 15,000,000.00 100% 6.00 18,000,000.00 3,000,000.00
AD 7,500,000.00 50.00% 3.00 9,000,000.00 1,500,000.00
CA 7,500,000.00 50.00% 3.00 9,000,000.00 1,500,000.00

January 1, 2021

CA, 1/1/20 9,000,000.00 CA, 1/1/21 6,000,000.00

AD 3,000,000.00 RA 2,400,000.00
CA, 1/1/21 6,000,000.00 IL 3,600,000.00

December 31, 2021

RA 2,400,000.00
Remaining life 2.00
Depreciation 1,200,000.00

17
January 1, 2021
Year Rate Revaluation Appreciation
COST 15,000,000.00 6.00 100% 22,500,000.00 7,500,000.00
RV 3,000,000.00 3,000,000.00
DA 12,000,000.00 19,500,000.00
AD 6,750,000.00 3.00 50.00% 9,750,000.00 3,000,000.00
CA 5,250,000.00 3.00 50.00% 9,750,000.00 4,500,000.00

December 31, 2021

Revalued amount 9,750,000.00 CA, 1/1/21 12,750,000.00

Remaining useful life 5.00 Depreciation 1,950,000.00
Depreciation 1,950,000.00 CA, 12/31/21 10,800,000.00

Downpayment 150,000.00
PV 600,000.00
750,000.00
675,000.00

18