Indicate how these items would be reported on the income statement of Hollerith Co.

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Indicate how these items would be reported on the income statement of Hollerith Co.
Answered Same DayDec 31, 2021

Solution

David answered on Dec 31 2021
34 Votes
Answer
Problem 10-4
(Dispositions, Including Condemnation, Demolition, and Trade-in) Presented
elow is a schedule of property dispositions for Hollerith Co.
Schedule of Property Dispositions
Cost Accumulated
Depreciation
Cash
Proceeds
Fair
Value
Nature of
Disposition
Land $40,000 — $31,000 $31,000 Condemnation
Building 15,000 — 3,600 — Demolition
Warehouse 70,000 $16,000 74,000 74,000 Destruction by fire
Machine 8,000 2,800 900 7,200 Trade-in
Furniture 10,000 7,850 — 3,100 Contribution
Automobile 9,000 3,460 2,960 2,960 Sale
The following additional information is available.
Land
On Fe
uary 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...
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