The following expenditures are related to land, land improvements, and buildings, which were acquired on November 1, 2009.
Required:
Determine the cost of the land, the building and the improvements (Round to the nearest dollar)
Prepare journal entries on December 31, 2009 for depreciation assuming the building will have a useful life of 20 years and no residual value. Use double declining balance method and the half-year convention. Depreciate the land improvements using straight-line method, a 5 year life, to the nearest month with zero residual value (to the nearest dollar).
Cost of real estate acquired for a new manufacturing plant The land is appraised for $262,800 and the building for $102,200. Real estate taxes paid by the purchaser Cost of removing a barn Architect’s fees for updating building Attorney’s fees for closing sale Grading land Paving parking lot Planting trees and shrubs Cost of repairs to building due to storm during construction Lights placed on driveway Fee to real estate broker $365,000$20,000$8,500$6,750$12,500$3,500$7,000$9,250$1,3004750$2,500
Determine break-even points in various scenarios including cash break-even and financial break-even.
Interpret the significance of operating cash flows in project evaluation.
Analyze the impact of depreciation on project costs and cash flows.
Understand the relationship between selling price, variable cost, and contribution margin.
Definitions:
Relate
To establish a connection or find similarities between things, or to empathize and understand someone's experiences or emotions.
Value Chain
A set of activities that a company performs to create value for its customers, from product design to post-sale service.
Open Systems
Organizations or entities that interact with their environment by exchanging information, resources, and energy, adapting and responding to external changes.
Research-Based Facts
Information and findings derived from systematic inquiry into a subject, supported by empirical evidence.