Allocating Payments and Receipts to Fixed Asset AccountsThe following payments and receipts are related to land, land improvements, and buildings acquired for use in awholesale apparel business. The receipts are identified by an asterisk.a. Fee paid to attorney for title search$3,000b. Cost of real estate acquired as a plant site: Land313,300Building (to be demolished)29,800c. Finder's fee paid to real estate agency17,600d. Delinquent real estate taxes on property, assumed by purchaser4,900e. Architect's and engineer's fees for plans for new building2,900f. Cost of removing building purchased with land in (b)11,700g. Proceeds from sale of salvage materials from old building43,100 *h. Cost of filling and grading land4,200i. Premium on one-year insurance policy during constructionj. Money borrowed to pay building contractor17,200734,600 *k. Special assessment paid to city for extension of water main to the property5,4001. Cost of repairing windstorm damage during construction14,900m. Cost of repairing vandalism damage during construction8,900n. Cost of trees and shrubbery planted1,000o. Cost of paving parking lot to be used by customers2,400p. Interest incurred on building loan during construction5,900q. Proceeds from insurance company for windstorm and vandalism damage36,800 *r. Payment to building contractor for new buildings. Refund of premium on insurance policy (i) canceled after 11 months783,200350 *Required:1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or OtherAccounts. Choose the correct account from the dropdown list for each letter and enter the appropriate amount.Enter receipts as negative amounts using the minus sign.Item Account Amountа.$b.$C.d.е.2$f.g.$ h.i.j.k.1.m.n.o.p.q.r.S.2. Determine the amount debited to Land, Land Improvements, and Building.Land Land Improvements Building$$$3. Since land used as a plant sitelose its ability to provide services, itdepreciated. Landimprovementslose their ability to provide services as time passes and are, therefore,4. What would be the effect on the income statement and balance sheet if the cost of filling and grading land of$17,200 [payment (i)] was incorrectly classified as Land Improvements rather than Land? Assume LandImprovements are depreciated over a 20-year life using the double-declining-balance method.%24%24%24%24%24%24%24

Fixed assets are the resources which provide the benefits to the owner after a certain time. They…

Allocating Payments and Receipts to Fixed Asset Accounts The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale apparel business. The receipts are identified by an asterisk. a. Fee paid to attorney for title search $3,000 b. Cost of real estate acquired as a plant site: Land 313,300 Building (to be demolished) 29,800 c. Finder's fee paid to real estate agency 17,600 d. Delinquent real estate taxes on property, assumed by purchaser 4,900 e. Architect's and engineer's fees for plans for new building 2,900 f. Cost of removing building purchased with land in (b) g. Proceeds from sale of salvage materials from old building 11,700 43,100 * h. Cost of filling and grading land 4,200 i. Premium on one-year insurance policy during construction 17,200 j. Money borrowed to pay building contractor 734,600 * k. Special assessment paid to city for extension of water main to the property 5,400 I. Cost of repairing windstorm damage during construction 14,900 m. Cost of repairing vandalism damage during construction 8,900 n. Cost of trees and shrubbery planted o. Cost of paving parking lot to be used by customers p. Interest incurred on building loan during construction q. Proceeds from insurance company for windstorm and vandalism damage r. Payment to building contractor for new building s. Refund of premium on insurance policy (i) canceled after 11 months 1,000 2,400 5,900 36,800 * 783,200 350 * Required: 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from the dropdown list for each letter and enter the appropriate amount. Enter receipts as negative amounts using the minus sign. Item Account Amount а. %24 b. 2$ C. $ d. 2$ е. 24 f. 2$ g. 2$

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q