Book Store​, ​Inc., opened an office in Cottage Grove​, Minnesota. Book Store incurred the following costs in acquiring​ land, making land​improvements, and constructing and furnishing the new sales​ building:

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Chapter1: Financial Statements And Business Decisions
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This is a corrected assignemnt, I am wondering how to get the equation for the journal entries? Where do those numbers come from? I understand everything except the last 4 journal entry solutions. Please help. 

 

 

 

Book Store​,

​Inc., opened an office in

Cottage Grove​,

Minnesota.

Book Store

incurred the following costs in acquiring​ land, making land​improvements, and constructing and furnishing the new sales​ building:

The company depreciates buildings over

30

​years, land improvements over

15

​years, and furniture over

12

​years, all on a​ straight-line basis with residual values of zero.

 

a.

Purchase price of land, including an old building that will be used

 

 

for a garage (land market value is $315,000; building market

 

 

value is $85,000)

$360,000

b.

Grading (leveling) land

8,200

c.

Fence around the land

31,600

d.

Attorney fee for title search on the land

900

e.

Delinquent real estate taxes on the land to be paid by Book Store

5,500

f.

Company signs at entrance to the property

1,200

g.

Building permit for the sales building

800

h.

Architect fee for the design of the sales building

92,870

i.

Masonry, carpentry, and roofing of the sales building

513,000

j.

Renovation of the garage building

38,330

k.

Interest cost on construction loan for sales building

9,400

l.

Landscaping (trees and shrubs)

6,300

m.

Parking lot and concrete walks on the property

52,800

n.

Lights for the parking lot and walkways

7,300

o.

Salary of construction supervisor (87% to sales building; 10%

 

 

to land improvements; and 3% to garage building renovations)

39,000

p.

Office furniture for the sales building

79,100

q.

Transportation and installation of furniture

900

 

 

Requirement 1. Identify the proper account​ (Land, Land​ Improvements, Sales​ Building, Garage​ Building, or​ Furniture) for each of the costs listed in the problem. Calculate the total cost of each asset.

Start with items a through​ i, next, enter items j through​ q, and lastly calculate the totals for each asset category. ​(If an input field is not used in the table leave the field​ empty; do not enter a zero. Round percentages to two places when calculating proportions​ (X.XX%), and use your computed percentages throughout. Round your final answers to the nearest whole​ dollar.)

 

 

 

 

Land

Sales

 

Garage

 

 

 

Item

 

 

Land

Improvements

Building

 

Building

 

Furniture

 

a.

 

 

$283,500

 

 

 

 

 

$76,500

 

 

 

b.

 

 

8,200

 

 

 

 

 

 

 

 

 

c.

 

 

 

 

$31,600

 

 

 

 

 

 

 

d.

 

 

900

 

 

 

 

 

 

 

 

 

e.

 

 

5,500

 

 

 

 

 

 

 

 

 

f.

 

 

 

 

1,200

 

 

 

 

 

 

 

g.

 

 

 

 

 

 

$800

 

 

 

 

 

h.

 

 

 

 

 

 

92,870

 

 

 

 

 

i.

 

 

 

 

 

 

513,000

 

 

 

 

 

 

 

 

 

Land

Sales

 

Garage

 

 

 

Item

 

 

Land

Improvements

Building

 

Building

 

Furniture

 

j.

 

 

 

 

 

 

 

 

38,330

 

 

 

k.

 

 

 

 

 

 

9,400

 

 

 

 

 

l.

 

 

 

 

6,300

 

 

 

 

 

 

 

m.

 

 

 

 

52,800

 

 

 

 

 

 

 

n.

 

 

 

 

7,300

 

 

 

 

 

 

 

o.

 

 

 

 

3,900

 

33,930

 

1,170

 

 

 

p.

 

 

 

 

 

 

 

 

 

 

$79,100

 

q.

 

 

 

 

 

 

 

 

 

 

900

 

                                         

Totals

 

 

$298,100

 

$103,100

 

$650,000

 

$116,000

 

$80,000

 

Requirement 2. All construction was complete and the assets were placed in service on

April

  1. Record depreciation for the year ended December 31. Round to the nearest dollar. ​(Record debits​ first, then credits. Exclude explanations from journal entries. Do not round intermediary calculations Only round the amount you input in the cell to the nearest​ dollar.)

Start by recording the depreciation on the land improvements.

Journal Entry

Date

Accounts 

Debit

Credit

Dec

31

Depreciation Expense - Land Improvements

5,155

 

 

 

Accumulated Depreciation - Land Improvements

 

5,155

   

 

 

 

   

 

 

 

​Next, record the sales building depreciation expense.

Journal Entry

Date

Accounts 

Debit

Credit

Dec

31

Depreciation Expense - Sales Building

16,250

 

 

 

Accumulated Depreciation - Sales Building

 

16,250

   

 

 

 

   

 

 

 

Now record the garage building depreciation expense.

Journal Entry

Date

Accounts 

Debit

Credit

Dec

31

Depreciation Expense - Garage Building

2,900

 

 

 

Accumulated Depreciation - Garage Building

 

2,900

   

 

 

 

   

 

 

 

Finish by recording the furniture depreciation expense.

Journal Entry

Date

Accounts 

Debit

Credit

Dec

31

Depreciation Expense - Furniture

5,000

 

 

 

Accumulated Depreciation - Furniture

 

5,000

   

 

 

 

   

 

 

 

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