a. Prepare entries to record the expenditures

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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FIXED ASSET 1

On January 1, 2020, PT ABC acquired real estate on which it planned to construct a factory. The company paid $150,000 in cash. ABC paid $15,000 to tear down an old building on the land. The salvaged materials were sold for $2,000.

Additional expenditures before construction began included $1,000 tax cost for land entitlement, $5,000 real estate broker's fee, $8,000 architect's fee, $870,000 construction cost, and $2,000 liability insurance during construction cost.

a. Prepare entries to record the expenditures

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