At December 31, 2019, certain accounts included in the property, plant, and equipment section of Blue Spruce Corporation’s statement of financial position had the following balances: Land $309,730 Buildings—Structure 882,700 Leasehold Improvements 704,930 Equipment 844,920 During 2020, the following transactions occurred: 1. Land site No. 621 was acquired for $799,790 plus a fee of $6,780 to the real estate agent for finding the property. Costs of $33,140 were incurred to clear the land. In clearing the land, topsoil and gravel were recovered and sold for $10,950. 2. Land site No. 622, which had a building on it, was acquired for $559,950. The closing statement indicated that the land’s assessed tax value was $308,680 and the building’s value was $101,830. Shortly after acquisition, the building was demolished at a cost of $27,640. A new building was constructed for $339,530 plus the following costs: Excavation fees $37,960 Architectural design fees 14,630 Building permit fee 2,410 “Green roof” design and construction (to be retrofitted every seven years) 35,770 Imputed interest on funds used during construction (share financing) 8,170 The building, completed and occupied on September 30, 2020, is expected to have a 30-year useful life. 3. A third tract of land (No. 623) was acquired for $264,550 and was put on the market for resale. 4. During December 2020, costs of $88,990 were incurred to improve leased office space. The related lease will terminate on December 31, 2022, and is not expected to be renewed. 5. Equipment was purchased under a royalty agreement. The terms of the agreement require Blue Spruce Corporation to pay royalties based on the units of production for the equipment. The equipment’s invoice price was $110,530, freight costs were $2,970, installation costs were $3,550, and royalty payments for 2020 were $14,830. (a) Calculate the balance at December 31, 2020 in each of the following accounts: Land, Leasehold Improvements, Buildings—Structure, Buildings—Roof, and Equipment. Ignore the related Accumulated Depreciation accounts. Land $ Leasehold Improvements $ Buildings—Structure $ Buildings—Roof $ Equipment $

At December 31, 2019, certain accounts included in the property, plant, and equipment section of Blue Spruce Corporation’s statement of financial position had the following balances: Land $309,730 Buildings—Structure 882,700 Leasehold Improvements 704,930 Equipment 844,920 During 2020, the following transactions occurred: 1. Land site No. 621 was acquired for $799,790 plus a fee of $6,780 to the real estate agent for finding the property. Costs of $33,140 were incurred to clear the land. In clearing the land, topsoil and gravel were recovered and sold for $10,950. 2. Land site No. 622, which had a building on it, was acquired for $559,950. The closing statement indicated that the land’s assessed tax value was $308,680 and the building’s value was $101,830. Shortly after acquisition, the building was demolished at a cost of $27,640. A new building was constructed for $339,530 plus the following costs: Excavation fees $37,960 Architectural design fees 14,630 Building permit fee 2,410 “Green roof” design and construction (to be retrofitted every seven years) 35,770 Imputed interest on funds used during construction (share financing) 8,170 The building, completed and occupied on September 30, 2020, is expected to have a 30-year useful life. 3. A third tract of land (No. 623) was acquired for $264,550 and was put on the market for resale. 4. During December 2020, costs of $88,990 were incurred to improve leased office space. The related lease will terminate on December 31, 2022, and is not expected to be renewed. 5. Equipment was purchased under a royalty agreement. The terms of the agreement require Blue Spruce Corporation to pay royalties based on the units of production for the equipment. The equipment’s invoice price was $110,530, freight costs were $2,970, installation costs were $3,550, and royalty payments for 2020 were $14,830. (a) Calculate the balance at December 31, 2020 in each of the following accounts: Land, Leasehold Improvements, Buildings—Structure, Buildings—Roof, and Equipment. Ignore the related Accumulated Depreciation accounts. Land $ Leasehold Improvements $ Buildings—Structure $ Buildings—Roof $ Equipment $

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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At December 31, 2019, certain accounts included in the property, plant, and equipment section of Blue Spruce Corporation’s statement of financial position had the following balances:

Land		$309,730
Buildings—Structure		882,700
Leasehold Improvements		704,930
Equipment		844,920

During 2020, the following transactions occurred:

Land site No. 621 was acquired for $799,790 plus a fee of $6,780 to the real estate agent for finding the property. Costs of $33,140 were incurred to clear the land. In clearing the land, topsoil and gravel were recovered and sold for $10,950.

Land site No. 622, which had a building on it, was acquired for $559,950. The closing statement indicated that the land’s assessed tax value was $308,680 and the building’s value was $101,830. Shortly after acquisition, the building was demolished at a cost of $27,640. A new building was constructed for $339,530 plus the following costs:

Excavation fees		$37,960
Architectural design fees		14,630
Building permit fee		2,410
“Green roof” design and construction (to be retrofitted every seven years)		35,770
Imputed interest on funds used during construction (share financing)		8,170

The building, completed and occupied on September 30, 2020, is expected to have a 30-year useful life.

A third tract of land (No. 623) was acquired for $264,550 and was put on the market for resale.

During December 2020, costs of $88,990 were incurred to improve leased office space. The related lease will terminate on December 31, 2022, and is not expected to be renewed.

Equipment was purchased under a royalty agreement. The terms of the agreement require Blue Spruce Corporation to pay royalties based on the units of production for the equipment. The equipment’s invoice price was $110,530, freight costs were $2,970, installation costs were $3,550, and royalty payments for 2020 were $14,830.

(a)

Calculate the balance at December 31, 2020 in each of the following accounts: Land, Leasehold Improvements, Buildings—Structure, Buildings—Roof, and Equipment. Ignore the related Accumulated Depreciation accounts.

Land		$
Leasehold Improvements		$
Buildings—Structure		$
Buildings—Roof		$
Equipment		$

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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