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 ceramic 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 290,000 Building (to be demolished) 55,000 c. Delinquent real estate taxes on property, assumed by purchaser 15,000 d. Cost of razing and removing building acquired in (b) 4,000 e. Proceeds from sale of salvage materials from old building 3,000 * f. Special assessment paid to city for extension of water main to the property 28,000 g. Architect's and engineer's fees for plans and supervision 70,000 h. Premium on one-year insurance policy during construction 7,000 i. Cost of filling and grading land 12,000 j. Money borrowed to pay building contractor 800,000 * k. Cost of repairing windstorm damage during construction 5,000 I. Cost of paving parking lot to be used by customers 33,000 m. Cost of trees and shrubbery planted 10,000 n. Cost of floodlights installed on parking lot 2,000 o. Cost of repairing vandalism damage during construction 3,000 p. Proceeds from insurance company for windstorm and vandalism damage 7,000 * q. Payment to building contractor for new building 900,000 r. Interest incurred on building loan during construction s. Refund of premium on insurance policy (h) canceled after 11 months 35,000 500 *
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 ceramic 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 290,000 Building (to be demolished) 55,000 c. Delinquent real estate taxes on property, assumed by purchaser 15,000 d. Cost of razing and removing building acquired in (b) 4,000 e. Proceeds from sale of salvage materials from old building 3,000 * f. Special assessment paid to city for extension of water main to the property 28,000 g. Architect's and engineer's fees for plans and supervision 70,000 h. Premium on one-year insurance policy during construction 7,000 i. Cost of filling and grading land 12,000 j. Money borrowed to pay building contractor 800,000 * k. Cost of repairing windstorm damage during construction 5,000 I. Cost of paving parking lot to be used by customers 33,000 m. Cost of trees and shrubbery planted 10,000 n. Cost of floodlights installed on parking lot 2,000 o. Cost of repairing vandalism damage during construction 3,000 p. Proceeds from insurance company for windstorm and vandalism damage 7,000 * q. Payment to building contractor for new building 900,000 r. Interest incurred on building loan during construction s. Refund of premium on insurance policy (h) canceled after 11 months 35,000 500 *
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![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.
b.
c.
d.
$4
$1
е.
f.
$
g.
$
h.
$4
i.
j.
$4
k.
%$4
1.
$4
$4
m.
n.
o.
$4
р.
%24
q.
r.
%$4
S.
2. Determine the amount debited to Land, Land Improvements, and Building.
Land
Land Improvements
Building
$
3. Land used as a plant site
lose its ability to provide services; thus, it
depreciated. However, land improvements
lose 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 $12,000 [payment (i)] was incorrectly classified as Land Improvements rather
than Land? Assume Land Improvements are depreciated over a 20-year life using the doubledeclining- balance method.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F88d58220-4c99-4038-b9cd-5ff14daeb0cb%2F53b2f392-1f8e-466b-8b37-3b74138ff343%2Fj5yqrr_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.
b.
c.
d.
$4
$1
е.
f.
$
g.
$
h.
$4
i.
j.
$4
k.
%$4
1.
$4
$4
m.
n.
o.
$4
р.
%24
q.
r.
%$4
S.
2. Determine the amount debited to Land, Land Improvements, and Building.
Land
Land Improvements
Building
$
3. Land used as a plant site
lose its ability to provide services; thus, it
depreciated. However, land improvements
lose 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 $12,000 [payment (i)] was incorrectly classified as Land Improvements rather
than Land? Assume Land Improvements are depreciated over a 20-year life using the doubledeclining- balance method.
Transcribed Image Text: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 ceramic 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
290,000
Building (to be demolished)
55,000
c. Delinquent real estate taxes on property, assumed by purchaser
15,000
d. Cost of razing and removing building acquired in (b)
4,000
e. Proceeds from sale of salvage materials from old building
3,000 *
f. Special assessment paid to city for extension of water main to the property
28,000
g. Architect's and engineer's fees for plans and supervision
70,000
h. Premium on one-year insurance policy during construction
7,000
i.
Cost of filling and grading land
12,000
j. Money borrowed to pay building contractor
800,000 *
k. Cost of repairing windstorm damage during construction
5,000
I.
Cost of paving parking lot to be used by customers
33,000
m. Cost of trees and shrubbery planted
10,000
n. Cost of floodlights installed on parking lot
2,000
o. Cost of repairing vandalism damage during construction
3,000
p. Proceeds from insurance company for windstorm and vandalism damage
7,000 *
q. Payment to building contractor for new building
900,000
r.
Interest incurred on building loan during construction
35,000
s. Refund of premium on insurance policy (h) canceled after 11 months
500 *
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