On March 1, 2024, Beldon Corporation purchased land as a factory site for $72,000. An old building on the property was demolished,and construction began on a new building that was completed on December 15, 2024. Costs incurred during this period are listedbelow:Demolition of old buildingArchitect's fees (for new building)Legal fees for title investigation of landProperty taxes on land (for period beginning March 1, 2024)Construction costsInterest on construction loan$ 5,00011,0008,0004,200620,0006,000Salvaged materials resulting from the demolition of the old building were sold for $3,200.Required:Determine the amounts that Beldon should capitalize as the cost of the land and the new building.Complete this question by entering your answers in the tabs below.Cost of LandCost of NewBuildingDetermine the amounts that Beldon should capitalize as the cost of the land.Note: Amounts to be deducted should be indicated with a minus sign.Capitalized cost of land:Total cost of land$0

Step 1:Computation of the capitalized cost of land:Capitalized cost of land: Purchase…

Answered: On March 1, 2024, Beldon Corporation…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter17: Business Tax Credits And The Alternative Minimum Tax

Section: Chapter Questions

Problem 11P

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At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.
During the current year, Alanna Co. had the following transactions pertaining to its new office building. A. What should Alanna Co. record on its books for the land? The total cost of land includes all costs of preparing the land for use. The demolition cost of the old building is added to the land costs, and the sale of the old building scrap is subtracted from the land cost. B. What should Alanna Co. record on its books for the building?
Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is worth 100,000 and the building is worth 300,000. What cost should Utica assign to the land and to the building, respectively?
On March 1, 2021, Beldon Corporation purchased land as a factory site for $71,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2021. Costs incurred during this period are listed below: Demolition of old building Architect's fees (for new building) Legal fees for title investigation of land Property taxes on land (for period beginning March 1, 2021) Construction costs Interest on construction loan Complete this question by entering your answers in the tabs below. Salvaged materials resulting from the demolition of the old building were sold for $3,100. Required: Determine the amounts that Beldon should capitalize as the cost of the land and the new building. Cost of Land Cost of New Building Capitalized cost of land: $ 9,500 10,000 7,500 4,100 Determine the amounts that Beldon should capitalize as the cost of the land. (Amounts to be deducted should be indicated with a minus sign.) Total cost of land 610,000…
On March 1, 2024, Beldon Corporation purchased land as a factory site for $72,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2024. Costs incurred during this period are listed below: Demolition of old building $ 5,000 Architect’s fees (for new building) 11,000 Legal fees for title investigation of land 8,000 Property taxes on land (for period beginning March 1, 2024) 4,200 Construction costs 620,000 Interest on construction loan 6,000 Salvaged materials resulting from the demolition of the old building were sold for $3,200. Required: Determine the amounts that Beldon should capitalize as the cost of the land and the new building.
S On March 1, 2024, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2024. Costs incurred during this period are listed below: Demolition of old building Architect's fees (for new building) Legal fees for title investigation of land Property taxes on land (for period beginning March 1, 2024) Construction costs Interest on construction loan 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. Complete this question by entering your answers in the tabs below. Cost of Land Cost of New Building Determine the amounts that Beldon should capitalize as the cost of the new building. Note: Amounts to be deducted should be indicated with a minus sign. Capitalized cost of building: Total cost of building $ 4,000…
On March 1, 2021, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2021. Costs incurred during this period are listed below: Demolition of old building $ 4,000Architect’s fees (for new building) 12,000Legal fees for title investigation of land 2,000Property taxes on land (for period beginning March 1, 2021) 3,000Construction costs 500,000Interest on construction loan 5,000 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…
On February 1, 2020, Nelson Corporation purchased a parcel of land as a factory site for $320,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2020. Costs incurred during this period are listed below: Demolition of pold building $20,000 Arcchitects fees $35,000 Legal Fees for title investigation and purchase contract $5,000 Contruction Cost $1,390,000 Salvaged materials resulting from demolition were sold for $10,000. Nelson should record the cost of the land and new building, respectively, as A) $330,000 and $1,425,000.…
On March 1, 2018, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2018. Costsincurred during this period are listed below:Demolition of old building $ 4,000Architect’s fees (for new building) 12,000Legal fees for title investigation of land 2,000Property taxes on land (for period beginning March 1, 2018) 3,000Construction costs 500,000Interest on construction loan 5,000Salvaged 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.
On July 1, 2024, Jekel & Hyde Incorporated purchased land and incurred other costs relative to the construction of a new warehouse. A summary of economic activities is listed below: Purchase price Title insurance Legal fees to purchase land cost of razing old building on lot Proceeds from sale of salvageable materials. Property taxes, January 1, 2024-June 30, 2024 cost of grading and filling building site Cost of building construction Interest on construction loan cost of constructing driveway cost of parking lot and fencing $ 200,000 $ 3,000 $ 2,500 11,500 (2,700) 4,500 10,500 Land Building Land improvements 635,000 13,500 9,500 13,500 Required: Indicate the accounts that would be affected by the above transactions and the resulting balance in each account. Apply the interest on the construction loan to the cost of the building only.
On July 1, 2024, a company purchased a $550,000 tract of land that is intended to be the site of a new office complex. The company incurred additional costs and realized salvage proceeds during 2024 as follows: Demolition of existing building on site $ 72,000 Legal and other fees to close escrow 12,400 Proceeds from sale of demolition scrap 9,800 What would be the balance in the land account as of December 31, 2024?
On April 1, 2020 ABC Co. purchased a tract of land as a factory site for P195,500. An existing building on the property was razed and construction was begun on a new factory building on May 1, 2020. Additional data are available as follows: Cost of razing old building: P35,000 Title insurance and legal fees to purchase land:P12,500 Architect's fees: P47,500 New building construction cost: P985,000 The recorded cost of the completed factory building should be * P1,030,000 P1,032,500 P1,045,000 P1,067,500 answer not given

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