Intermediate Accounting: Reporting and Analysis
2nd Edition
ISBN: 9781285453828
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 16P
1.
To determine
Prepare a schedule showing the land account of Company B as on September 30, 2017.
2.
To determine
Prepare a schedule showing the capitalized cost of office building account of Company B as on September 30, 2017.
3.
To determine
Prepare a schedule showing the
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
On January 1, 2018, the Blackstone Corporation purchased a tract of land (site number 11) with a building for$600,000. Additionally, Blackstone paid a real estate broker’s commission of $36,000, legal fees of $6,000, andtitle insurance of $18,000. The closing statement indicated that the land value was $500,000 and the buildingvalue was $100,000. Shortly after acquisition, the building was razed at a cost of $75,000.Blackstone entered into a $3,000,000 fixed-price contract with Barnett Builders, Inc., on March 1, 2018, forthe construction of an office building on land site 11. The building was completed and occupied on September30, 2019. Additional construction costs were incurred as follows:Plans, specifications, and blueprints $12,000Architects’ fees for design and supervision 95,000To finance the construction cost, Blackstone borrowed $3,000,000 on March 1, 2018. The loan is payable in 10annual installments of $300,000 plus interest at the rate of 14%. Blackstone’s average amounts…
On January 1, 2020, Blair Corporation purchased for $500,000 a tract of land (site number 101) with a building. Blair paid a real estate broker’s commission of $36,000, legal fees of $6,000, and title guarantee insurance of $18,000. The closing statement indicated that the land value was $500,000 and the building value was $100,000. Shortly after acquisition, the building was razed at a cost of $54,000.
Blair entered into a $3,000,000 fixed-price contract with Slatkin Builders, Inc. on March 1, 2020, for the construction of an office building on land site number 101. The building was completed and occupied on September 30, 2021. Additional construction costs were incurred as follows.
Plans, specifications, and blueprints Architects’ fees for design and supervision
$21,000 82,000
The building is estimated to have a 40-year life from date of completion and will be depreciated using the 150% declining-balance method.
To finance construction costs, Blair borrowed $3,000,000 on…
On March 1, 2017, Geoffrey Company acquired real estate, on
which it planned to construct a small office building, by paying
$85,000 in cash. An old warehouse on the property was
demolished at a cost of $8,200; the salvaged materials were so
for $2,200. Additional expenditures before construction began
included $1,500 attorney's fee for work concerning the land
purchase, $5,500 real estate broker's fee, $9,100 architect's fee,
and $16,000 to put in driveways and a parking lot.
Instructions
(a) Determine the amount to be reported as the cost of the
land.
(b)
For each cost not used in part (a), indicate the account to
be increased
Chapter 11 Solutions
Intermediate Accounting: Reporting and Analysis
Ch. 11 - Briefly explain the meaning of the four factors...Ch. 11 - Prob. 2GICh. 11 - Would it be desirable to require all companies to...Ch. 11 - What is the depredation base?Ch. 11 - Prob. 5GICh. 11 - A company should use an accelerated depreciation...Ch. 11 - Prob. 7GICh. 11 - Prob. 8GICh. 11 - Prob. 9GICh. 11 - Prob. 10GI
Ch. 11 - Under U.S. GAAP, in a year in which the fair value...Ch. 11 - Prob. 12GICh. 11 - Prob. 13GICh. 11 - Compare the group and composite methods of...Ch. 11 - Prob. 15GICh. 11 - Describe the accounting for changes and...Ch. 11 - Prob. 17GICh. 11 - Prob. 18GICh. 11 - Explain the meaning of an impaired asset and...Ch. 11 - Prob. 20GICh. 11 - Prob. 21GICh. 11 - Prob. 22GICh. 11 - (Appendix 11.1) Why might depreciation on a...Ch. 11 - A method that excludes residual value from the...Ch. 11 - Prob. 2MCCh. 11 - Prob. 3MCCh. 11 - Prob. 4MCCh. 11 - A machine with a 4-year estimated useful life and...Ch. 11 - At the end of the expected useful life of a...Ch. 11 - The composite depreciation method: a. is applied...Ch. 11 - Prob. 8MCCh. 11 - A fixed asset with a 5-year estimated useful life...Ch. 11 - Crowder Company acquired a tract of land...Ch. 11 - Susquehanna Company purchased an asset at the...Ch. 11 - Akron Incorporated purchased an asset at the...Ch. 11 - Albany Corporation purchased equipment at the...Ch. 11 - Utica Machinery Company purchases an asset for...Ch. 11 - In Year 1, Utica Machinery Company uses the asset...Ch. 11 - At the beginning of Year 1, Herkimer Co....Ch. 11 - At the end of Year 1, Herkimer Co. sells two...Ch. 11 - Buffalo, Inc., uses composite depreciation for its...Ch. 11 - Prob. 9RECh. 11 - Assume the same information as in RE11-3, except...Ch. 11 - Oneonta Co. owns equipment with a cost of 300,000...Ch. 11 - At the beginning of the current year, Andy Company...Ch. 11 - Prob. 13RECh. 11 - (Appendix 11.1) Auburn Company purchased an asset...Ch. 11 - Gruman Company purchased a machine for 220,000 on...Ch. 11 - Prob. 2ECh. 11 - Prob. 3ECh. 11 - Prob. 4ECh. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Loban Company purchased four cars for 9,000 each...Ch. 11 - Wilcox Company acquires four machines that have...Ch. 11 - Lightning Delivery Company purchased a new...Ch. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Bailand Company purchased a building for 210,000...Ch. 11 - Prob. 14ECh. 11 - On January 1, 2012, Vallahara Company purchased...Ch. 11 - Prob. 16ECh. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Prob. 1PCh. 11 - Prob. 2PCh. 11 - Prob. 3PCh. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - Prob. 6PCh. 11 - Prob. 7PCh. 11 - Prob. 8PCh. 11 - During 2016, Ryel Companys controller asked you to...Ch. 11 - Prob. 10PCh. 11 - On January 1, 2011, Borstad Company purchased...Ch. 11 - Prob. 12PCh. 11 - Prob. 13PCh. 11 - Prob. 14PCh. 11 - Prob. 15PCh. 11 - Prob. 16PCh. 11 - Prob. 17PCh. 11 - Prob. 18PCh. 11 - Prob. 19PCh. 11 - Prob. 20PCh. 11 - Prob. 21PCh. 11 - Prob. 1CCh. 11 - Prob. 2CCh. 11 - Straight-Line and Composite Depreciation Portland...Ch. 11 - Depreciation continues to be one of the most...Ch. 11 - The following two statements concern depreciation:...Ch. 11 - Prob. 6C
Knowledge Booster
Similar questions
- On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.arrow_forwardDuring 2016, Snow Company acquired/received the following assets: Land D acquired for P220,000. In addition, to acquire the land, Snow Company paid a P15,000 commission to a real estate agent. P25,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P5,000 Land J was acquired on September 30, 2016 on which a new building will be immediately constructed. The cost related to the acquisition included the following: Cash payment P1,400,000 Broker’s fee 80,000 Option price paid for the land acquired 120,000 Option price for land that was not acquired 40,000 Delinquent property taxes for 2015 that was assumed and paid by Snow Company…arrow_forwardOn March 1, 2017, Sunland Company acquired real estate, on which it planned to construct a small office building, by paying $84,000 in cash. An old warehouse on the property was demolished at a cost of $9,000; the salvaged materials were sold for $1,860. Additional expenditures before construction began included $1,360 attorney's fee for work concerning the land purchase, $4,900 real estate broker's fee, $8,860 architect's fee, and $14,800 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of landarrow_forward
- On March 1, 2022, Crane Corporation acquired real estate, on which it planned to construct a small office building, by paying $83,200 in cash. An old warehouse on the property was demolished at a cost of $8,480; the salvaged materials were sold for $1,720. Additional expenditures before construction began included a $1,560 legal fee for work concerning the land purchase, a $9,440 architect's fee, and $14,560 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of Land $arrow_forwardOn March 1, 2027, Crane Company acquired real estate, on which it planned to construct a small office building, by paying $86,500 in cash. An old warehouse on the property was demolished at a cost of $9,500; the salvaged materials were sold for $1,960. Additional expenditures before construction began included $1,460 attorney's fee for work concerning the land purchase, $5,150 real estate broker's fee, $8,960 architect's fee, and $15,300 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of land $ 115950arrow_forwardOn January 1, 2017, Salina Company purchased land and a building for $2,240,000. At the time of the purchase, it was estimated that the building had a market value of $1,400,000. On January 5, Salina installed a fence around the property at a cost of $14,000. Given this information, the entry to record the cost of the fence would include a a.Debit to Fence Expense for $14,000. b.Debit to Land for $14,000. c.Credit to Land for $14,000. d.Debit to Land Improvements for $14,000.arrow_forward
- On March 1, 2022, Blossom Company acquired real estate, on which it planned to construct a small office building, by paying $80,500 in cash. An old warehouse on the property was demolished at a cost of $8,300; the salvaged materials were sold for $1,720. Additional expenditures before construction began included $1,220 attorney's fee for work concerning the land purchase, $4,550 real estate broker's fee, $8.720 architect's fee, and $14,100 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land.arrow_forwardOn March 1, 2025, Wildhorse Co. acquired real estate, on which it planned to construct a small office building, by paying $80,000 in cash. An old warehouse on the property was demolished at a cost of $8,200; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,200 attorney's fee for work concerning the land purchase, $4,500 real estate broker's fee, $8,700 architect's fee, and $14,000 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of the land $arrow_forward(Disposition of Assets) On April 1, 2017, Gloria Estefan Company received a condemnation award of $430,000 cash as compensation for the forced sale of the company’s land and building, which stood in the path of a new state highway. The land and building cost $60,000 and $280,000, respectively, when they were acquired. At April 1, 2017, the accumulated depreciation relating to the building amounted to $160,000. On August 1, 2017, Estafan purchased a piece of replacement property for cash. The new land cost $90,000, and the new building cost $400,000.InstructionsPrepare the journal entries to record the transactions on April 1 and August 1, 2017.arrow_forward
- Larkspur Mining Company purchased land on February 1, 2017, at a cost of $1,210,800. It estimated that a total of 54,900 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $102,600. It believes it will be able to sell the property afterwards for $114,000. It incurred developmental costs of $228,000 before it was able to do any mining. In 2017, resources removed totaled 27,450 tons. The company sold 20,130 tons.Compute the following information for 2017. (a) Per unit mineral cost $ (b) Total material cost of December 31, 2017, inventory $ (c) Total material cost in cost of goods sold at December 31, 2017 $ Click if you would like to Show Work for this question: Open Show Work Please answer all parts of my…arrow_forwardOn July 1, 2017, Sandhill Company received $1,012,000 cash as compensation for the forced sale (condemnation) of the company’s land and building. The state planned to use the property to build a new on-ramp for a nearby highway. The land and building cost $460,000 and $782,000, respectively, when they were acquired. At July 1, 2017, the accumulated depreciation relating to the building amounted to $345,000. On December 1, 2017, Sandhill purchased a piece of replacement property for cash. The new land cost $331,200, and the new building cost $984,400.Prepare the journal entries to record the transactions on July 1 and December 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)arrow_forwardOn January 1, 2017, Alberta Company purchased land and a building for $1,120,000. At the time of the purchase, it was estimated that the building had a market value of $700,000. On January 5, Alberta installed a fence around the property at a cost of $7,000. Given this information, the journal entry to record the purchase of the land and building would include a a.debit to land for $700,000. b.debit to land for $427,000. c.debit to land for $420,000. d.debit to land for $413,000.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning