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exchange has commercial substance.) Exercise 10-1 The expenditures and receipts below are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are enclosed in parentheses. (a) Money borrowed to pay building contractor (signed a note) $(285,400 ) (b) Payment for construction from note proceeds 285,400 (c) Cost of land fill and clearing 11,790 (d) Delinquent real estate taxes on property assumed by purchaser 7,300 (e) Premium on 6-month insurance policy during construction 8,580 (f) Refund of 1month insurance premium because construction completed early (1,430 ) (g) Architect’s fee on building 26,200 (h) Cost of real estate purchased as a plant site (land $209,100 and building $52,900) 262,000 (i) Commission fee paid to real estate agency 8,970 (j) Installation of fences around property 3,770 (k) Cost of razing and removing building 11,710 (l) Proceeds from salvage of demolished building (4,550 ) (m) Interest paid during construction on money borrowed for construction 13,150 (n) Cost of parking lots and driveways 20,050 (o) Cost of trees and shrubbery planted (permanent in nature) 14,440 (p) Excavation costs for new building 2,700 Identify each item by letter and list the items in columnar form, using the headings shown below. All receipt amounts should be reported in parentheses. For any amounts entered in the Other Accounts column, also indicate the account title. Question 9 Sage Company purchased machinery for $174,300 on January 1, 2017. It is estimated that the machinery will have a useful life of 20 years, salvage value of $14,700, production of 81,900 units, and working hours of 44,000. During 2017, the company uses the machinery for 11,440 hours, and the machinery produces 9,009 units.

Compute depreciation under the straight-line, units-of-output, working hours, sum-of-the-years’-digits, and double-decliningbalance methods. Brief Exercise 11-8 Carla Company owns equipment that cost $1,008,000 and has accumulated depreciation of $425,600. The expected future net cash flows from the use of the asset are expected to be $560,000. The fair value of the equipment is $448,000. Prepare the journal entry, if any, to record the impairment loss. Brief Exercise 12-8 Concord Corporation purchased Johnson