Use the following to answer questions 1 – 4JT Company purchased land as a factory site. An oldbuildingconstruction began on a new building. Costs incurredduring the first year are listed below:thepropertydemolished, andonwasLand purchased as a factory siteBuilding construction costsInterest cost related to the constructionDemolition of old building|Title investigation of land$500,0002,500,00050,00040,0007,0005,000Property taxes on land (for the next year)Architect fees (for new building)36,5007,000Sale of salvaged materials1. $land for the next year" should be capitalized in the LandHow much of the "property taxes on theaccount?How should the "sale of salvaged materials" berecorded?2.A. As an added cost of the landB. As a reduction of the cost of the landC. As an added cost to the buildingD. As a reduction of the cost of the building3. $What amount should be recorded to theLand account?4. $What amount should be recorded to theBuilding account? 4. $What amount should be recorded tothe Building account?

Solution:- 1)Calculation of the "property taxes on the land for the next year" should be capitalized…

1. $ land for the next year" should be capitalized in the Land How much of the "property taxes on the асcount? How should the "sale of salvaged materials" be recorded? 2. A. As an added cost of the land B. As a reduction of the cost of the land C. As an added cost to the building D. As a reduction of the cost of the building 3. $ What amount should be recorded to the Land account?

1. $ land for the next year" should be capitalized in the Land How much of the "property taxes on the асcount? How should the "sale of salvaged materials" be recorded? 2. A. As an added cost of the land B. As a reduction of the cost of the land C. As an added cost to the building D. As a reduction of the cost of the building 3. $ What amount should be recorded to the Land account?

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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