3. Donated assets.Cheng Company has recently decided to accept a proposal from the City of Bel Aire that publicly owned propertywith a large warehouse located on it will be donated to Cheng if Cheng will build a branch plant in Bel Aire. Theappraised value of the property is $500,000 and of the warehouse is $1,000,000.InstructionsPrepare the entry by Cheng for the receipt of the properties.DebitCredit4. Capitalization of interest.During 2017, Barden Building Company constructed various assets at a total cost of $14,700,000. The weightedaverage accumulated expenditures on assets qualifying for capitalization of interest during 2017 were$9,800,000. The company had the following debt outstanding at December 31, 2017:1. 10%, 5-year note to finance construction of various assets,dated January 1, 2017, with interest payable annually on January 1$6,300,0002. 12%, ten-year bonds issued at par on December 31, 2011, with interestpayable annually on December 317,000,0003. 9%, 3-year note payable, dated January 1, 2016, with interest payableannually on January 13,500,000InstructionsCompute the amounts of each of the following (show computations).1. Avoidable interest.2. Total interest to be capitalized during 2017. 1. Acquisition of equipment (truck)$ 16,000that the company carries ininventory. The computer system costs$ 15,200Truck# 3 has a list price of2$and is acquired in exchange for a computer system$ 12,000 andis normallysold by the company forThe company uses a perpetual inventory system.Acquisition costs of trucksDebitCreditCompany operates a retail computer store. Toimprove de livery services to customers, the companypurchases four new trucks onApril 12020The terms of eachof the four trucks are described as follows:# 4 has a list price ofstock of the company. The stock has a par value per share of $10 and a market price of $ 13 per shareTruck$ 14,000and is acquired in exchange for a1,000 shares of commonTruck# 1 has a list price of$ 15,000and is acquired with a cash payment of$13,900DebitCreditDebitCreditTruck# 2 has a list price of$ 16,000and is acquired for a down payme nt of$2,0002. Nonmonetary exchange.A machine cost $300,000, has annual depreciation expense of $60,000, and has accumulated depreciation of$150,000 on December 31, 2017. On April 1, 2018, when the machine has a fair value of $120,000, it isexchanged for a similar machine with a fair value of $360,000 and the proper amount of cash is paid. Theexchange lacked commercial substance.and a zero-intere st-bearing note with a face amount of14,000The note is dueApril2021The company normally has to pay an interest rate ofand the de alership has an incremental borrowing rate ofInstructionsPrepare all entries that are necessary at April 1, 2018.10%for such a borrowing,8%DebitCreditDebitCredit

Journal entry:The monetary transaction of the business is recorded in the books of accounts called…

3. Donated assets. Cheng Company has recently decided to accept a proposal from the City of Bel Aire that publicly owned property with a large warehouse located on it will be donated to Cheng if Cheng will build a branch plant in Bel Aire. The appraised value of the property is $500,000 and of the warehouse is $1,000,000. Instructions Prepare the entry by Cheng for the receipt of the properties. Debit Credit

3. Donated assets. Cheng Company has recently decided to accept a proposal from the City of Bel Aire that publicly owned property with a large warehouse located on it will be donated to Cheng if Cheng will build a branch plant in Bel Aire. The appraised value of the property is $500,000 and of the warehouse is $1,000,000. Instructions Prepare the entry by Cheng for the receipt of the properties. Debit Credit

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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On March 1, 2024, Beldon Corporation purchased land as a factory site for $66,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2024. Costs incurred during this period are listed below: Demolition of old building Architect's fees (for new building) Legal fees for title investigation of land Property taxes on land (for period beginning March 1, 2024) Construction costs Interest on construction loan $ 7,000 18,000 5,000 3,600 560,000 8,000 Salvaged materials resulting from the demolition of the old building were sold for $2,600. Required: Determine the amounts that Beldon should capitalize as the cost of the land and the new building. Complete this question by entering your answers in the tabs below. Cost of Land Cost of New Building Determine the amounts that Beldon should capitalize as the cost of the land. Note: Amounts to be deducted should be indicated with a minus sign. Capitalized cost of land: Total…
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What is the maximum price you would be willing to pay for the business? If an investor group purchased the restaurant near the campus for $255, 867 and the fair value of the assets they acquired was $202,000, identify the account along with its balance, that is used to record the additional amount paid over the fair value of the assets.
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…
Please explain it properly
Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $1,235,000. Harding paid $280,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $296,000; Building, $880,000 and Equipment, $584,000. What value will be reported for the building on the balance sheet? Multiple Choice O $355.000 $880,000 $617,500 $140,000
What is the maximum price you would be willing to pay for the business? If an investor group purchased the restaurant near the campus for $255, 867 and the fair value of the assets they acquired was $202,000, identify the account along with its balance, that is used to record the additional amount paid over the fair value of the assets.
On January 1, 2020, Williamsburg Inc. acquired a piece of land to construct a manufacturing plant. You have the following information about this transaction: $240,000 4% of price $5,000 Price of land Tax on transfer of land Legal free to transfer property of land to Williamsburg $6,000 $1,000 $860,000 $2,100 $6,400 Cost of demolishing old building on the land Income from scrap that was sold of old building Cost of manufacturing building construction Cost of insurance during construction Cost of annual insurance on manufacturing building after the construction is finished Cost to repair a piece of equipment used in the $1,000 factories construction Management decided to allocate the following amounts to the parts of the factory building, and estimated the corresponding useful lives and residual values as follows: Allocated cost Useful life Residual value Allocated Cost Useful Life Residual Value $20,000 $1,000 $0 $4,000 $10,000 Windows 10 years $20,000 $100,000 Furnace 10 years…
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For the following transactions, prepare the entries that would be recorded in the general fixed assets account group for the city of Evert.a. The city purchased property costing $1,300,000, with three-fourths of the cost allocated to a building.b. A mansion belonging to the great-granddaughter of the city’s founder was donated to the city. The land cost the original owner $600, and the house was built for an additional $50,000. At the time of donation, the property had an estimated fair value of $550,000, of which $330,000 was allocable to the land. The property was accepted and is to be used as a park and a museum.c. A central fire station, financed by general obligation bonds, was two-thirds complete at yearend with costs to date of $800,000 that were recorded in the capital project fund.d. A new fire engine was purchased for $165,000. The city traded a used fire engine originally purchased for $100,000. The trade-in value was $25,000. Both engines were purchased from general…
Red River Bakery purchases land, building, and equipment for a single purchase price of $260,000. However, the estimated fair values of the land, building, and equipment are $126,000, $198,000, and $36,000, respectively, for a total estimated fair value of $360,000. Required: Determine the amounts Red River should record in the separate accounts for the land, the building, and the equipment.
The president of ACCO 202 Corporation donated a building to Ana G. Méndez Corporation. The building had an original cost of $200,000, a book value of $75,000, and a fair market value of $180,000. To record this donation, Ana G. Méndez would a. Make a memorandum entry b. Debit Building for $75,000 and credit Gain for $75,000 c. Debit Building for $200,000 and credit Gain for $200,000 d. Debit Building for $180,000 and credit Gain for $180,000