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FINANCIAL ACCOUNTING
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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Samtech Manufacturing purchased land and a building for $4 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: $16,000 Title insurance Legal fees for drawing the contract Property taxes State transfer fees An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.3 and $1.1 million, respectively. Property taxes included $6,000 of delinquent taxes. Question A Journal entries for the assets Samtech acquired in these transactions would include: a debit to Land for $3,018,750 a debit to Buildings for $0 a debit to Land for $4,031,000 a debit to Buildings for $1,007,750 5,000 36,000 4,000
Transcribed Image Text:Samtech Manufacturing purchased land and a building for $4 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: $16,000 Title insurance Legal fees for drawing the contract Property taxes State transfer fees An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.3 and $1.1 million, respectively. Property taxes included $6,000 of delinquent taxes. Question A Journal entries for the assets Samtech acquired in these transactions would include: a debit to Land for $3,018,750 a debit to Buildings for $0 a debit to Land for $4,031,000 a debit to Buildings for $1,007,750 5,000 36,000 4,000
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