Salvaged materials resulting from the

demolition of the old building were sold for $2,000.

Required:

Determine the amounts that Beldon should capitalize as the cost of the land and the new building.

2. E 10-8

Pinewood Company purchased two buildings on four acres of land. The lump-sum purchase price was $900,000. According to independent appraisals, the fair values were $450,000 (building A) and $250,000 (building B) for the buildings and $300,000 for the land.

Required:

Determine the initial valuation of the buildings and the land.

  3. E 10-14

Funseth Farms Inc. purchased a tractor in 2013 at a cost of $30,000. The tractor was sold for $3,000 in 2016. Depreciation recorded through the disposal date totaled $26,000.

Required:

1. Prepare the journal entry to record the sale.

2. Assuming that the tractor was sold for $10,000, prepare the journal entry to record the sale.

 4.  E 10-18

The Bronco Corporation exchanged land for equipment. The land had a book value of $120,000 and a fair value of $150,000. Bronco paid the owner of the equipment $10,000 to complete the exchange which has commercial substance.

Required:

1. What is the fair value of the equipment?

2. Prepare the journal entry to record the exchange.

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