Question

. Cergo Computers constructed a new training center in 2014, which you have

Answer 1

1. The schedule is prepared as follows:

2. The assets capitalized into different classes carry different rates and methods of depreciation.   Items capitalized under land will not be depreciated and hence it is capital expenditure not effecting the expenditure.

Explanation:

1.  Schedule of expenses

Expenses                      Land                   Land            Building         equipment

                                                         improvements

Attorney’s fee, land acq   34900

Cost of land                       589000

Architect’s fee, building design                                  102000

Building                                                                         1020000

Parking lot and sidewalk                       135600

Electrical wiring, building                                                164000

Landscaping                                             55000

Cost of surveying land                              9,200

Training equipment, tables, and chairs                                             136,400

Installation of training equipment                                                      68,000

Cost of grading the land                            14,000

Cost of changes in building to soundproof rooms        59,200

Employee expenses alloted  12800          6400           38400            6400

TOTAL                                     636700        220200       1383600       210800

2.  Depreciation on land improvements start when the project becomes substantially completed.

Depreciation on building starts when the building construction is substantially completed.

Depreciation on Equipments starts when the equipments begin to be put to use.