Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Shaun Pollok purchased a car wash for $480,000. If purchased separately, the land would have cost $120,000, the building $270,000, and the equipment $210,000. Determine the amount that should be recorded in the new business’s records for land, building, and equipment.
Unilever acquires land for $86,000 cash. Additional costs are as follows: removal of shed $300, broker commission $1,530, paving of parking lot $10,000, gardening $1,500, closing costs $560, and a salvage value of lumber of shed $120. Unilever will record the acquisition cost of the land as:
Fresh Veggies, Incorporated (FVI), purchases land and a warehouse for $490,000. In addition to the purchase price, FVI makes the
following expenditures related to the acquisition: broker's commission, $29,000; title insurance, $1,900; and miscellaneous closing
costs, $6,000. The warehouse is immediately demolished at a cost of $29,000 in anticipation of building a new warehouse.
Determine the cost of the land and record the purchase (assuming cash was paid for all expenditures). (If no entry is required for a
particular transaction/event, select "No Journal Entry Required" in the first account field.)
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Record the purchase of the land.
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- Merchant Company purchased property for a building site. The costs associated with the property were: Purchase price $ 187,000 Real estate commissions 16,200 Legal fees 2,000 Expenses of clearing the land 3,200 Expenses to remove old building 2,200 What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?arrow_forwardDuring the current year, Alanna Co. had the following transactions pertaining to its new office building. Purchase price of land $120,000 Legal fees for contracts to purchase land 3,000 Architech fees 17,000 Demolition of the old building on site 9,000 Sale of scrap from old building 6,000 Construction cost of new building 700,000 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. $fill in the blank 1 B. What should Alanna Co. record on its books for the building? $fill in the blank 2arrow_forwardDuring the current year, Alanna Co. had the following transactions pertaining to its new office building. Purchase price of land $130,000 Legal fees for contracts to purchase land 4,000 Architech fees 16,000 Demolition of the old building on site 12,000 Sale of scrap from old building 5,000 Construction cost of new building 630,000 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?arrow_forward
- Worthington, Inc., paid $90,000 to acquire land, land improvements, and a building. The company obtained two appraisals: The land was appraised at $30,000, the land improvements were appraised at $10,000, and the building was appraised at $60,000. The allocation of the cost of the purchase result in cost figures ofarrow_forwardPurchased land costs 2,500,000 and a Bank transfer is made. The cost of excavation of the old building and the base of the new building is 300,000 + %10VAT, the Property tax paid is 60,000 and Estate company invoice is 30,000+%10VAT is on the account. Please do necessary accounting enteries.arrow_forwardA company purchased a track of land with the intent to use the land to put a new building. However, an old building is sitting where the new building is to be constructed, and the old building must be removed at a cost of $10,000. Should the cost of removing the old building be part of the cost of the building or be part of the cost of the land? Please explain:arrow_forward
- Nash's Trading Post, LLC purchased land adjacent to its plant to improve access for trucks making deliveries. Expenditures incurred in purchasing the land were as follows: purchase price, $55,000; broker’s fees, $6,000; title search and other fees, $5,000; demolition of an old building on the property, $5,700; grading, $1,200; digging foundation for the road, $3,000; laying and paving driveway, $25,000; lighting $7,500; signs, $1,500.List the items and amounts that should be included in the Land account. select an expenditure Digging Foundation for the RoadLand Acquisition CostTitle Search and Other FeesGradingLaying and Paving DrivewayDemolition of Old BuildingPurchase PriceLightingSignsBroker’s Fees $enter a dollar amount select an expenditure Purchase PriceLightingDemolition of Old BuildingTitle Search and Other FeesBroker’s FeesSignsLaying and Paving…arrow_forwardPrevin Brothers Inc. purchased a piece of land at a cost of $ 27,000. Closing costs were $ 1,400. An old building was removed at a cost of $ 10,200. How much must be recorded as the cost of the land? Present your answer with the details of all the calculations made to obtain the final cost of the land.arrow_forwardFarley Corporation purchased land adjacent to its plant to improve access for trucks making deliveries. Expenditures incurred in purchasing the land were as follows: purchase price, $70,000; broker's fees, $6,000; title search and other fees, $5,000; demolition of an old building on the property, $5,700; grading $1,200; digging foundation for the road, $3,000; laying and paving driveway. $25,000; lighting $7,500; signs, $1,500. List the items and amounts that should be included in the Land account. $ $arrow_forward
- The company has recieved a donation of land from a rich local philanhropist. the land originally cost the philanhropist $48,000. on the date of the donation, it had a market value of $111,000. Make the journal entry necessary on the book of the company to record the receipt of the landarrow_forwardA land developer purchased some farmland to build a suburb. The full cost was $2,000,000 and the package was appraised as follows: land: $1,200,000; buildings, $900,000; land improvements, $300,000. In addition, the developer spent $550,000 installing utilities, $1,300,000 preparing the streets and $300,000 building a parking lot. The developer received $100,000 when the topsoil was sold. What amount should be recorded in the Land Improvements account? A)$250,000 B)$2,300,000 C)$600,000 D) $2,400,000 Please explain how and why to calculate impairment, I have tried and used the formula : (Fair Value/Total Fair Value) x purchase price - amount recoverable. This was my calculation but it is incorrect (300000/2450000) x 2000000 - 100000 = 1448980 Please provide the correct formula and how to know where to input each number !arrow_forwardChina Express purchased land for $140,000. Prior to construction on the new building, the land had to be cleared of trees and brush. Construction costs incurred during the first year are listed below: Land clearing costs $ 5,000 Architect fees (for new building) 30,000 Legal fees for title investigation of land 1,000 Property taxes on land (for the first year) 2,500 Building construction costs 440,000 Required:Determine the amounts that should be recorded in the land and the new building accounts.arrow_forward
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