P11-10 Sheryl Crow Corporation, a manufacturer of

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P11-10 (Comprehensive Depreciation Computations) Sheryl Crow Corporation, a manufacturer of
steel products, began operations on October 1, 2006. The accounting department of Crow has started the
fixed-asset and depreciation schedule presented on page 563. You have been asked to assist in completing
this schedule. In addition to ascertaining that the data already on the schedule are correct, you have
obtained the following information from the company’s records and personnel.

1. Depreciation is computed from the first of the month of acquisition to the first of the month of
disposition.

2. Land A and Building A were acquired from a predecessor corporation. Crow paid $820,000 for the
land and building together. At the time of acquisition, the land had an appraised value of $90,000,
and the building had an appraised value of $810,000.

3. Land B was acquired on October 2, 2006, in exchange for 2,500 newly issued shares of Crow’s common
stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of
$30 per share. During October 2006, Crow paid $16,000 to demolish an existing building on this
land so it could construct a new building.

4. Construction of Building B on the newly acquired land began on October 1, 2007. By September
30, 2008, Crow had paid $320,000 of the estimated total construction costs of $450,000. It is estimated
that the building will be completed and occupied by July 2009.

5. Certain equipment was donated to the corporation by a local university. An independent appraisal
of the equipment when donated placed the fair market value at $30,000 and the salvage value at
$3,000.

6. Machinery A’s total cost of $164,900 includes installation expense of $600 and normal repairs and maintenance
of $14,900. Salvage value is estimated at $6,000. Machinery A was sold on February 1, 2008.

7. On October 1, 2007, Machinery B was acquired with a down payment of $5,740 and the remaining
payments to be made in 11 annual installments of $6,000 each beginning October 1, 2007. The
prevailing interest rate was 8%. The following data were abstracted from present-value tables
(rounded).

Present value of $1.00 at 8% Present value of an ordinary annuity of $1.00 at 8%
10 years .463 10 years 6.710
11 years .429 11 years 7.139
15 years .315 15 years 8.559

SHERYL CROW CORPORATION
Fixed Asset and Depreciation Schedule
For Fiscal Years Ended September 30, 2007, and September 30, 2008
Depreciation
Expense
Estimated Year Ended
Acquisition Depreciation Life in September 30
Assets Date Cost Salvage Method Years 2007 2008
Land A October 1, 2006 $ (1) N/A N/A N/A N/A N/A
Building A October 1, 2006 (2) $40,000 Straight-line (3) $17,450 (4)
Land B October 2, 2006 (5) N/A N/A N/A N/A N/A
Building B Under $320,000 — Straight-line 30 — (6)
Construction to date
Donated Equipment October 2, 2006 (7) 3,000 150% declining 10 (8) (9)
balance
Machinery A October 2, 2006 (10) 6,000 Sum-of-the- 18 (11) (12)
years’-digits
Machinery B October 1, 2007 (13) — Straight-line 20 — (14)
N/A—Not applicable
Instructions

For each numbered item on the schedule above, supply the correct amount. Round each answer to the
nearest dollar.