The Blowing Rock Partnership purchased land for $1,200,000 with plans to build a spa on the site. The partnership tore down severalbuildings on the property for $20,000. Salvaged materials with a cost of $6,000 will be repurposed in the spa. Trees were removed for$5,000 and drainage was added for $30,000. The area was fenced for $41,000. A preliminary consultation with an architect cost$2,500 and legal fees of $3,200 were paid in connection with changing the zoning of the property. What accounts will be debited forthese costs?O Land, $1,249,000; Land Improvements, $41,000; Building, $5,700O Land, $1,235,000; Land Improvements, $55,000; Architect Expense, $2,500,000; Legal Expense, $3,200Land, $1,255,000; Land Improvements, $41,000; Building, $11,700O Land, $1,249,000; Land Improvements, $41,000; Building, $2,500; Legal Expense, $3,200

A. Land, $1,249,000; Land Improvements, $41,000; Building, $5,700This option correctly debits Land…

Answered: The Blowing Rock Partnership purchased…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sharkey's Fun Center contains a number of electronic games as well as a miniature golf course and various rides located outside the building. Paul Sharkey, the owner, would like to construct following information about the slide: water slide on one portion of his property. Mr. Sharkey gathered the a. Water slide equipment could be purchased and installed at a cost of $345,000. According to the manufacturer, the slide would be usable for 12 years after which it would have no salvage value. b. Mr. Sharkey would use straight-line depreciation on the slide equipment. c. To make room for the water slide, several rides would be dismantled and sold. These rides are fully depreciated, but they could be sold for $117,500 to an amusement park in a nearby city. d. Mr. Sharkey concluded that about 50,000 more people would use the water slide each year than have been using the rides. The admission price would be $3.80 per person (the same price the Fun Center has been charging for the old rides).…
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