Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 10, Problem 1PA
The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk.
Instructions
- 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Indicate receipts by an asterisk. Identify each item by letter and list the amounts in columnar form, as follows:
- 2. Determine the amount debited to Land, Land Improvements, and Building.
- 3. The costs assigned to the land, which is used as a plant site, will not be
depreciated , while the costs assigned to land improvements will be depreciated. Explain this seemingly contradictory application of the concept of depreciation. - 4. What would be the effect on the current year’s income statement and
balance sheet if the cost of filling and grading land of $12,000 [payment (i)] was incorrectly classified as Land Improvements rather than Land? Assume that Land Improvements are depreciated over a 20-year life using the double-declining-balance method.
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The following expenditures and receipts are related to land, land improvements, and buildings acquired for use in a business
enterprise. The receipts are enclosed in parentheses.
a.
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j.
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n.
O.
P.
Item
a.
b.
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Identify each item by letter and list the items in columnar form, using the headings shown below. All receipt amounts should be
reported in parentheses. For any amounts entered in the Other Accounts column, also indicate the account title. (Enter receipt amounts
using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). If no entry is required in other accounts, select "No Entry" for
the account titles.)
k.
I.
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n.
0.
Money borrowed to pay building contractor (signed a note)
Payment for construction from note proceeds
p.
Cost of land fill and clearing
Delinquent real estate taxes on property assumed by purchaser
Premium on 6-month insurance policy during construction
Refund of 1-month insurance premium…
The following payments and receipts are related to land, land improvements, and buildings
acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk.
a. Fee paid to attorney for title search ....
b. Cost of real estate acquired as a plant site: Land....
$ 2,500
285,000
Building (to be demolished).
55,000
c. Delinquent real estate taxes on property, assumed by purchaser .
d. Cost of tearing down and removing building acquired in (b)
e. Proceeds from sale of salvage materials from old building
Special assessment paid to city for extension of water main to the property...
g. Architect's and engineer's fees for plans and supervision ...
h. Premium on one-year insurance policy during construction..
Cost of filling and grading land ......
j. Money borrowed to pay building contractor.
k. Cost of repairing windstorm damage during construction
Cost of paving parking lot to be used by customers
m. Cost of trees and shrubbery planted
n. Cost of floodlights…
Land improvements include:
Oa. surveying fees.
Ob. sales tax.
Oc. freight.
С.
Od. outdoor lighting.
Chapter 10 Solutions
Financial Accounting
Ch. 10 - ONeil Office Supplies has a fleet of automobiles...Ch. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Immediately after a used truck is acquired, a new...Ch. 10 - Keyser Company purchased a machine that has a...Ch. 10 - Is it necessary for a business to use the same...Ch. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQ
Ch. 10 - A building acquired at the beginning of the year...Ch. 10 - Equipment acquired at the beginning of the year at...Ch. 10 - A truck acquired at a cost of 69,000 has an...Ch. 10 - A tractor acquired at a cost of 420,000 has an...Ch. 10 - A building acquired at the beginning of the year...Ch. 10 - A building acquired at the beginning of the year...Ch. 10 - Equipment with a cost of 180,000 has an estimated...Ch. 10 - A truck with a cost of 82,000 has an estimated...Ch. 10 - On February 14, Garcia Associates Co. paid 2,300...Ch. 10 - On August 7, Green River Inflatables Co. paid...Ch. 10 - Equipment was acquired at the beginning of the...Ch. 10 - Equipment was acquired at the beginning of the...Ch. 10 - Prob. 7PEACh. 10 - Prob. 7PEBCh. 10 - On December 31, it was estimated that goodwill of...Ch. 10 - On December 31, it was estimated that goodwill of...Ch. 10 - Prob. 9PEACh. 10 - Prob. 9PEBCh. 10 - Prob. 1ECh. 10 - Prob. 2ECh. 10 - Northwest Delivery Company acquired an adjacent...Ch. 10 - Warner Freight Lines Co. incurred the following...Ch. 10 - Jackie Fox owns and operates Platinum Transport...Ch. 10 - Quality Move Company made the following...Ch. 10 - Tri-City Ironworks Co. reported 44,500,000 for...Ch. 10 - Convert each of the following estimates of useful...Ch. 10 - A refrigerator used by a meat processor has a cost...Ch. 10 - A diesel-powered tractor with a cost of 180,000...Ch. 10 - Prior to adjustment at the end of the year, the...Ch. 10 - A John Deere tractor acquired on January 4 at a...Ch. 10 - A storage tank acquired at the beginning of the...Ch. 10 - Sandblasting equipment acquired at a cost of...Ch. 10 - A building with a cost of 1,200,000 has an...Ch. 10 - Willow Creek Company purchased and installed...Ch. 10 - Equipment acquired on January 8, 2013, at a cost...Ch. 10 - Equipment acquired on January 6, 2013, at a cost...Ch. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Apple Inc. designs, manufactures, and markets...Ch. 10 - Prob. 22ECh. 10 - Prob. 23ECh. 10 - The following table shows the revenue and average...Ch. 10 - Prob. 25ECh. 10 - Prob. 26ECh. 10 - Prob. 27ECh. 10 - On October 1, Bentley Delivery Services acquired a...Ch. 10 - The following payments and receipts are related to...Ch. 10 - Montes Coffee Company purchased packaging...Ch. 10 - Perdue Company purchased equipment on April 1,...Ch. 10 - New lithographic equipment, acquired at a cost of...Ch. 10 - The following transactions, adjusting entries, and...Ch. 10 - Prob. 6PACh. 10 - Prob. 1PBCh. 10 - Waylander Coatings Company purchased waterproofing...Ch. 10 - Prob. 3PBCh. 10 - New tire retreading equipment, acquired at a cost...Ch. 10 - The following transactions, adjusting entries, and...Ch. 10 - Prob. 6PBCh. 10 - Prob. 1CPCh. 10 - The following is an excerpt from a conversation...Ch. 10 - Tuttle Construction Co. specializes in building...Ch. 10 - Prob. 5CP
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