Problem 11-10 Marin Corporation, a manufacturer of steel products, began operations on October 1, 2016. The accounting department of Marin has started the fixed-asset and depreciation schedule presented below. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel.
1. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition.
2. Land A and Building A were acquired from a predecessor corporation. Marin paid $790,000 for the land and building together. At the time of acquisition, the land had an appraised value of $90,500, and the building had an appraised value of $814,500.
3. Land B was acquired on October 2, 2016, in exchange for 2,300 newly issued shares of Marin's common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $31 per share. During October 2016, Marin paid $17,600 to demolish an existing building on this land so it could construct a new building.
4. Construction of Building B on the newly acquired land began on October 1, 2017. By September 30, 2018, Marin had paid $335,100 of the estimated total construction costs of $447,600. It is estimated that the building will be completed and occupied by July 2019.
5. Certain equipment was donated to the corporation by a local university. An independent appraisal of the equipment when donated placed the fair value at $41,900 and the salvage value at $2,800.
6. Machinery A's total cost of $169,600 includes installation expense of $620 and normal repairs and maintenance of $14,300. Salvage value is estimated at $5,700. Machinery A was sold on February 1, 2018.
7. On October 1, 2017, Machinery B was acquired with a down payment of $6,310 and the remaining payments to be made in 11 annual installments of $6,570 each beginning October 1, 2017. The prevailing interest rate was 8%. The following data were abstracted from present value tables (rounded).
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Present value
of $1.00 at 8%
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Present value
of an ordinary annuity
of $1.00 at 8%
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10 years
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0.463
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10 years
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6.710
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11 years
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0.429
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11 years
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7.139
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15 years
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0.315
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15 years
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8.559
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Complete the schedule below. (Round answers to 0 decimal places, e.g. 45,892.)
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MARIN CORPORATION
Fixed-Asset and Depreciation Schedule
For Fiscal Years Ended September 30, 2017, and September 30, 2018
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Depreciation
Expense
Year Ended
September 30
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Assets
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Acquisition Date
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Cost
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Salvage
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Depreciation Method
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Estimated Life in Years
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2017
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2018
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Land A
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October 1, 2016
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(1)
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$
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N/A
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N/A
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N/A
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N/A
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N/A
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Building A
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October 1, 2016
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(2)
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$36,400
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Straight-line
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(3)
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$12,973
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(4)
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Land B
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October 2, 2016
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(5)
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N/A
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N/A
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N/A
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N/A
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N/A
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Building B
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Under Construction
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$335,100 to date
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—
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Straight-line
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30
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—
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(6)
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Donated Equipment
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October 2, 2016
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(7)
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2,800
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150% declining-balance
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10
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(8)
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(9)
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Machinery A
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October 2, 2016
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(10)
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5,700
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Sum-of-the-years'-digits
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8
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(11)
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(12)
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Machinery B
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October 1, 2017
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(13)
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—
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Straight-line
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20
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—
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(14)
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