#6 Example

Glenwood Industrial Gear, Inc. incurred the following costs associated with the purchase of a piece of land that it will use to build a retail store: Purchase price of the land $450,000 Cash received from Sale of salvaged parts already on land $20,000 Current year property taxes $3,400 Demolition of the old building $30,000 Ground breaking ceremony (food and supplies) $3,500 Back Property Taxes $14,700 Land preparation and leveling $17,500   What amount should Glenwood Industrial Gear, Inc. capitalize for the land asset? Group of answer choices

Facetious Company incurred the following expenditures related to the construction of a new home office:  Purchase price of land and an old apartment building 2,000,000 Fair value of land 1,800,000 Legal fees, including fee for title search 10,000 Payment of land mortgage and related interest due at time of sale 50,000 Payment of delinquent property taxes assumed 20,000 Cost of razing the apartment building 30,000 Grading and drainage on land site 15,000 Architect fee on new building 200,000 Payment to building contractor 8,000,000 Interest cost on specific borrowing during construction 300,000 Payment of medical bills of employees accidentally injured while inspecting building construction 10,000 Cost of paving driveway and parking lot 40,000 Cost of trees, shrubs and other landscaping 55,000 Cost of installing lights in parking lot 5,000 Premium for insurance on building during construction 25,000 Cost of open house party to celebrate opening of building 60,000   1. What is the cost…

Determining the Cost of an AssetOmar Corporation paid $300,000 for a tract of land that had an old gas station on it. The gas station was demolished at a cost of $20,000 and a new warehouse was constructed on the site at a cost of $550,000. In addition, several other costs were incurred: Legal fees (associated with the purchase of the land) $45,000 Architect fees (associated with the new warehouse) $50,000 Interest on the construction loan (for the new warehouse) $24,000    What value should be assigned to the tract of land? $Answer  What value should be assigned to the new warehouse? $Answer

Determining the Cost of an AssetOmar Corporation paid $200,000 for a tract of land that had an old gas station on it. The gas station was demolished at a cost of $20,000 and a new warehouse was constructed on the site at a cost of $550,000. In addition, several other costs were incurred: Legal fees (associated with the purchase of the land) $35,000 Architect fees (associated with the new warehouse) $42,000 Interest on the construction loan (for the new warehouse) $18,000   (a) What value should be assigned to the tract of land? $Answer     (b) What value should be assigned to the new warehouse? $Answer

Auto purchased a $500,000 tract of land that is intended to be the site of a new office complex. The company incurred additional costs and realized salvage proceeds as follows: Demolilitipn of existing building on site: $75,000 Legal and other fees to close escrow: $15,000 Proceeds from sale of demolition scrap: $10,000 What would be the cost of land? A. $500,000 B. $575,000 C. $580,000 D. $590,000

A 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 Building

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?

Merchant Company purchased property for a building site. The costs associated with the property were:   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?

A company made the following expenditures in connection with the construction of a new building: Architect's fees 100,000 14,400,000 Cash paid for land and unusable building on the land Construction costs of new building 48,000,000 Construction survey 50,000 Excavation for basement construction 1,200,000 Freight on machinery purchased 76,800 Installation of machinery 120,000 Legal fees for title search 144,000 Machinery purchased for operations 4,800,000 Removal of old building 864,000 Salvage from sale of old building materials Special base for the machinery (192,000) 10,000 Answer the following: 1. How much should be recorded as cost of Land, Building and Machinery? 2. Assuming that the Building will be depreciated over 10 years with no salvage value, how much should be the annual depreciation expense? 3. Assume that the company will use unit-of production method for the depreciation of machinery. The estimated total production is 1,000,000 units with the following production for the…