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Summary week 4 group project acc422.docx Week 4- Group Assignment ACC/422 P10-4Â (LO1,4,6)Â GROUPWORKÂ (Dispositions, Including Condemnation, Demolition, and Trade-In)Â Presented below is a schedule of property dispositions for Hollerith Co. Schedule of Pr$5.49
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Summary week 4 group project acc422.docx Week 4- Group Assignment ACC/422 P10-4Â (LO1,4,6)Â GROUPWORKÂ (Dispositions, Including Condemnation, Demolition, and Trade-In)Â Presented below is a schedule of property dispositions for Hollerith Co. Schedule of Pr
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week 4 group project Week 4- Group Assignment ACC/422 P10-4Â (LO1,4,6)Â GROUPWORKÂ (Dispositions, Including Condemnation, Demolition, and Trade-In)Â Presented below is a schedule of property dispositions for Hollerith Co. Schedule of Property Dispositions COST ACCUMULATED DEPRECIAT...
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Week 4- Group Assignment
ACC/422
P10-4 (LO1,4,6) GROUPWORK (Dispositions, Including Condemnation, Demolition, and
Trade-In) Presented below is a schedule of property dispositions for Hollerith Co.
, 2
Schedule of Property Dispositions
COST ACCUMULATED COST FAIR VALUE NATURE OF
DEPRECIATION PROCEEDS DISPOSAL
LAND 40,000 - 31,000 31,000 CONDEMATIO
N
BUILDING 15,000 - 3600 - DEMOLITION
WAREHOUSE 70,000 16,000 74,000 74,000 DISTRUCTION
BY FIRE
MACHINE 8,000 2,800 900 7,200 TRADE IN
FURNITURE 10,000 7,850 - 3,100 CONTRIBUTIO
N
AUTOMOBILE 9,000 3,460 2,968 2,960 SALE
The following additional information is available.
Land: On February 15, a condemnation award was received as consideration for unimproved
land held primarily as an investment, and on March 31, another parcel of unimproved land to be
held as an investment was purchased at a cost of $35,000.
Building: On April 2, land and building were purchased at a total cost of $75,000, of which 20%
was allocated to the building on the corporate books. The real estate was acquired with the
intention of demolishing the building, and this was accomplished during the month of
November. Cash proceeds received in November represent the net proceeds from demolition of
the building.
Warehouse: On June 30, the warehouse was destroyed by fire. The warehouse was purchased
January 2, 2014, and had depreciated $16,000. On December 27, the insurance proceeds and
other funds were used to purchase a replacement warehouse at a cost of $90,000.
Machine: On December 26, the machine was exchanged for another machine having a fair value
of $6,300 and cash of $900 was received. (The exchange lacks commercial substance.)
Furniture: On August 15, furniture was contributed to a qualified charitable organization. No
other contributions were made or pledged during the year.
Automobile: On November 3, the automobile was sold to Jared Winger, a stockholder.
Indicate how these items would be reported on the income statement of Hollerith Co.
LAND: Loss 41,000 – 31,000 = 9,000
Condemnation Loss $9,000 – Reported as extraordinary on the income statement.
Building: Cost of building less cash proceeds 15,000-3,600 – Allocated to land. (No gain or Loss
recognized)
Warehouse: Destroyed by Fire – Insurance Proceeds
Cost less accumulated depreciation 70,000-16,000 = 54,000
X + 54,000 = FV 74,000 = X = 20,000 realized gain on income statement
Machine: Fair Value = 7,200
Cost 8,000 less accumulated depreciation 2,800 = 5,200
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