Question 1. The John Company purchase a machine on Nov 1 ,2002 for $148,000. at the time of acquisition,the machine was estimated to have a useful life of ten years and an estimated salvage value of $4,000. John has recorded monthly depreciation using the straight line method.on July 1,2011,the machine was sold for $13,000.
What should be the loss recognized from the sale of the machine?
Question 2. Five years ago,Goodwill purchase a patent for $110,000, lower demand for the product under the patent had an estimated useful life of eleven years. It currently has a remaining useful life of four years. the current fair value of the patent is $43,000. Company management estimate that the patent will generate future cash flow of $12,000 per year for the next four years.
What is the amount of the impairment loss to be recognized
Question 3. On February 12, Laker Company purchased a tract of land as a factory site for $175,000.AN existing building on the property was razed and construction was begun on a new factory building in march the same year. additional data are available as follows:
cost of razing old building-----------35,000
title insurance----------- 12,500
artichect fees----------------------- 42,500
new building construction cost---- 875,000
What is the recorded cost of the completed factory building?