O january 1 bison purchased land and buildings for 20

Reference no: EM13573865

Bison Industries is in its first year of operations. Bison purchased the following assets during 2012:

· On January 1, Bison purchased land and buildings for $20 million. The amount allocated to land is $5 million and the amount allocated to the buildings is $15 million. The buildings' expected useful life is 30 years and its salvage value is $2 million.

· On January 1, Bison purchased a delivery truck for $20,000. The truck has a useful life of 7 years and no expected salvage value.

· On April 1, Bison purchased some machinery for $1 million. The machinery is to be depreciated over 10 years and has a $50,000 salvage value.

· Bison's standard practice is to recognize depreciation expense to the nearest month in the year of acquisition or disposal.

· Bison uses the straight-line method of depreciation

Use MS Excel to prepare an annual depreciation schedule for the fixed assets of Bison Industries as of December 31, 2012. At a minimum the schedule should include the following information:

· Asset

· Cost

· Salvage Value

· Depreciable Cost

· Useful life

· Date of Acquisition

· Depreciation Expense* (for the 2012 income statement)

· Accumulated Depreciation* (as of December 31, 2012)

· Carrying Value* (as of December 31, 2012)

· Totals* for Cost, Depreciation Expense and Carrying Value

Students may include other information as appropriate for the carrying out of formulas in the schedule.

Students should format cells such that amounts are rounded and presented to the nearest dollar.

* The cells for Depreciation Expense, Accumulated Depreciation, Carrying Value and Totals should all be based on formulas utilizing the other cells within the spreadsheet. Students are not to do separate calculations to input the answers. Let the spreadsheet do the calculations for you. Instructors will be checking the spreadsheet by changing input fields and testing the resulting calculations of Depreciation Expense, Accumulated Depreciation, and Carrying Value. The grade for this project will be based on correct solutions, proper formulas, and formatting of the schedule.

Reference no: EM13573865

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