FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Related questions
Question
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 | $3,200 |
| b. | Cost of real estate acquired as a plant site: Land | 340,700 |
| Building (to be demolished) | 32,400 | |
| c. | Delinquent real estate taxes on property, assumed by purchaser | 19,200 |
| d. | Cost of tearing down and removing building acquired in (b) | 5,400 |
| e. | Proceeds from sale of salvage materials from old building | 3,200* |
| f. | Special assessment paid to city for extension of water main to the property | 12,800 |
| g. | Architect’s and engineer’s fees for plans and supervision | 46,800 |
| h. | Premium on one-year insurance policy during construction | 4,500 |
| i. | Cost of filling and grading land | 18,700 |
| j. | Money borrowed to pay building contractor | 798,900* |
| k. | Cost of repairing windstorm damage during construction | 5,900 |
| l. | Cost of paving parking lot to be used by customers | 16,200 |
| m. | Cost of trees and shrubbery planted | 9,600 |
| n. | Cost of floodlights installed on parking lot | 1,100 |
| o. | Cost of repairing vandalism damage during construction | 2,600 |
| p. | Proceeds from insurance company for windstorm and vandalism damage | 6,400* |
| q. | Payment to building contractor for new building | 851,700 |
| r. | Interest incurred on building loan during construction | 40,000 |
| s. | Refund of premium on insurance policy (h) canceled after 11 months | 375* |
Required:
1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from the dropdown list for each letter and enter the appropriate amount. Enter receipts as negative amounts using the minus sign.
| Item | Account | Amount |
| a. | $fill in the blank 2 | |
| b. | $fill in the blank 4 | |
| c. | $fill in the blank 6 | |
| d. | $fill in the blank 8 | |
| e. | $fill in the blank 10 | |
| f. | $fill in the blank 12 | |
| g. | $fill in the blank 14 | |
| h. | $fill in the blank 16 | |
| i. | $fill in the blank 18 | |
| j. | $fill in the blank 20 | |
| k. | $fill in the blank 22 | |
| l. | $fill in the blank 24 | |
| m. | $fill in the blank 26 | |
| n. | $fill in the blank 28 | |
| o. | $fill in the blank 30 | |
| p. | $fill in the blank 32 | |
| q. | $fill in the blank 34 | |
| r. | $fill in the blank 36 | |
| s. | $fill in the blank 38 |
2. Determine the amount debited to Land, Land Improvements, and Building.
| Land | Land Improvements | Building |
| $fill in the blank 39 | $fill in the blank 40 | $fill in the blank 41 |
3. Since land used as a plant site lose its ability to provide services, it
4. What would be the effect on the current year’s income statement and
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 4 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- What is the cost of the land, based upon the following data? Land purchase price $192,605 Broker's commission 15,004 Payment for the demolition and removal of existing building 4,204 Cash received from the sale of materials salvaged from the demolished building 1,211 $fill in the blank 1arrow_forwardRahularrow_forwardIntel purchases land. Information related to this transaction is following: Purchase cost of land $ 180,000 Property taxes due on the land 5,000 Title and attorney fees 2,000 Cost of cleaning the land 4, 400 Cost of paving a parking lot 20, 000 Sales taxes on the transaction 1, 000 What amount does Intel record as the cost for the land? Group of answer choices $187, 400 $192, 400 $211, 400 $180,000arrow_forward
- Sandhill Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment. Abstract company's fee for title search Architect's fees Cash paid for land and dilapidated building thereon Removal of old building Less: Salvage Interest on short-term loans during construction Excavation before construction for basement Machinery purchased (subject to 2% cash discount, which was not taken) Freight on machinery purchased Storage charges on machinery, necessitated by noncompletion of building when machinery was delivered New building constructed (building construction took 6 months from date of purchase of land and old building) Assessment by city for drainage project Hauling charges for delivery of machinery from storage to new building Installation of machinery Trees, shrubs, and other landscaping after completion of building Show Transcribed Text Installation of machinery Trees, shrubs, and other landscaping after…arrow_forwardRodriguez Company pays $342,225 for real estate with land, land improvements, and a building. Land is appraised at $245.000; land improvements are appraised at $73,500; and a building is appraised at $171,500. 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase.arrow_forwardA company purchased property for a building site. The costs associated with the property were: Purchase price $175,000 Real estate commissions 15,000 Legal fees. Expenses of clearing the land Expenses to remove old building 800 2,000 1,000 What portion of these costs should be allocated to the cost of the land and what portion should be alloca the cost of the new building? $175,800 to Land; $18,800 to Building O $190,000 to Land; $3,800 to Building $190,800 to Land; $1,000 to Building O $192,800 to Land; $0 to Building O $193,800 to Land; $0 to Buildingarrow_forward
- Calculate and allocate basis for the following problems. 1. A property is acquired for a purchase price of $230,000 cash plus acquisition costs of $20,000. The tax assessment for this property is as follows: Assessed Value Land Improvements Total assessments $40,000 160,000 $200,000 a. What is the acquisition basis for this property? b. What is the allocation for land? c. What is the allocation for improvements?arrow_forwardWhat is the cost of the land, based upon the following data? Land purchase price $179,980 Broker's commission 15,546 Payment for the demolition and removal of existing building 3,928 Cash received from the sale of materials salvaged from the demolished building 2,519 $fill in the blank 1arrow_forwardDetermining cost of land On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $36,000 in cash and giving a short-term note for $273,000. Legal fees paid were $1,850, delinquent taxes assumed were $11,300, and fees paid to remove an old building from the land were $22,300. Materials salvaged from the demolition of the building were sold for $4,600. A contractor was paid $939,400 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.arrow_forward
- homework i Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $846,300 cash. The land was appraised at $194,649 and the building at $778,596. Required: a. What is the accounting term for this type of acquisition? b. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. c. Would the company recognize a gain on the purchase? d. Record the purchase in a horizontal statements model. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Check my work Record the purchase in a horizontal statements model. Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar. In the Statement of Cash Flows column, use the initials OA to designate operating IA for investing activity, FA for financing activity, NC for net change in cash and NA for not affected. Enter any decreases to account balances and…arrow_forwardFrom page 7-2 of the VLN, intangible assets are long term assets and would NOT include: Group of answer choices A. Goodwill B. Natural gas C. Patents D. Copyrightsarrow_forwardDetermine the cost of land. BE9.1 (LO 1), AP These expenditures were incurred by Dobbin Company in purchasing land: cash price $60,000, assumed accrued taxes $5,000, attorney's fees $2,100, real estate broker's commission $3,300, and clearing and grading $3,500. What is the cost of the land? Determine the cost of a truck. PE marrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education