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  • Auditing Problems 6

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    czymon
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    The document shows the calculation of carrying values and depreciation expense for land, buildings, and machinery. It starts with the original balances, makes adjustments for donated stock and assets sold, calculates accumulated depreciation using rates of 2% for buildings and 10% for machinery, and determines a loss on machinery sold in 2021. Total depreciation expense for 2021 was $63,900.

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    The document shows the calculation of carrying values and depreciation expense for land, buildings, and machinery. It starts with the original balances, makes adjustments for donated stock and assets sold, calculates accumulated depreciation using rates of 2% for buildings and 10% for machinery, and determines a loss on machinery sold in 2021. Total depreciation expense for 2021 was $63,900.

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    7 views1 page

    Auditing Problems 6

    Uploaded by

    czymon
    The document shows the calculation of carrying values and depreciation expense for land, buildings, and machinery. It starts with the original balances, makes adjustments for donated stock and assets sold, calculates accumulated depreciation using rates of 2% for buildings and 10% for machinery, and determines a loss on machinery sold in 2021. Total depreciation expense for 2021 was $63,900.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 1

    1 Land Building Total

    Unadjusted balances 660,000 990,000 1,650,000


    Sale of donated stock
    Land(75,000 * 660/1650) (30,000) (30,000)
    Building(75,000 * 990/1650) (45,000) (45,000)
    Adjusted balances 630,000 945,000 1,575,000

    2
    Adjusted balance of building 945,000
    Less: Accumulated depreciation(945,000 * 2% * 2) 37,800
    Carrying value of Building as of December 31, 2021 907,200

    3 Machinery (444,000 + 6,000) 450,000


    Less: Machinery sold 15,000
    Adjusted balance of machinery 435,000
    Less: Accumulated depreciation(435,000 * 10% * 2) 87,000
    Carrying value of Machinery as of December 31, 2021 348,000

    4 Depreciation Expense - Building(945,000 * 2%) 18,900


    Depreciation Expense - Machinery(450,000 * 10%) 45,000
    Total depreciation expense for 2021 63,900

    5 Sales price 6,000


    Less: Carrying value
    Cost 15,000
    Less: Accumulated depreciation(15,000 * 10% * 2) 3,000 12,000
    Gain(Loss) on sale (6,000)

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