General accounting. Cordinal company purchased land in 2014 Cardinal Company purchased land in 2014 for the purpose of building anew factory. Cardinal incurred the following costs in 2014.Cost of landLegal fees required to purchase land$500,000$20,000Cost of tearing down the old building on the land $50,000Sale of bricks from old building$10,000New building costs incurred so far$200,000Land should be capitalized at what amount?a. $500,000.b. $700,000.c. $560,000.d. $520,000.

Step 1:- Define Capitalizing Fixed AssetsLand acquired by a firm should be recorded in the books of…

Answered: Cardinal Company purchased land in 2014…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 38P

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Capital versus Revenue Expenditures On January 1, 2014, Jose Company purchased a building for $200,000 and a delivery truck for $20,000. The following expenditures have been incurred during 2016: â€¢ The building was painted at a cost of $5,000. â€¢ To prevent leaking, new windows were installed in the building at a cost of $10,000. â€¢ To improve production, a new conveyor system was installed at a cost of $40,000. â€¢ The delivery truck was repainted with a new company logo at a cost of $1,000. â€¢ To allow better handling of large loads, a hydraulic lift system was installed on the truck at a cost of $5,000. â€¢ The trucks engine was overhauled at a cost of $4,000. Required Determine which of those costs should be capitalized. Also record the journal entry for the capitalized costs. Assume that all costs were incurred on January 1, 2016. Determine the amount of depreciation for the year 2016. The company uses the straight-line method and depreciates the building over 25 years and the truck over six years. Assume zero residual value for all assets. How would the assets appear on the balance sheet of December 31, 2016?
On December 1, 2010, Hogan Co. purchased a tract of land as a factory site for $800,000. The old building on the property was razed, and salvaged materials resulting from demolition were sold. Additional costs incurred and salvage proceeds realized during December 2010 were as follows: 150. Cost to raze old building Legal fees for purchase contract and to record ownership Title guarantee insurance Proceeds from sale of salvaged materials $70,000 10,000 16,000 8,000 In Hogan's December 31, 2010 statement of financial position, what amount should be reported as land? a. $826,000. b. $862,000. c. $888,000. d. $896,000.
On September 10, 2018, Harry Co. incurred the following costs for one of its printing presses:Purchase of attachment $65,000Installation of attachment 5,000Replacement parts for renovation of press 18,000Labor and overhead in connection with renovation of press 7,000Neither the attachment nor the renovation increased the estimated useful life of the press. However, the renovation resulted in significantly increased productivity. What amount of the costs should be capitalized?a. $0.b. $77,000.c. $88,000.d. $95,000.
During 2016, Snow Company acquired/received the following assets: Land D acquired for P220,000. In addition, to acquire the land, Snow Company paid a P15,000 commission to a real estate agent. P25,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P5,000 Land J was acquired on September 30, 2016 on which a new building will be immediately constructed. The cost related to the acquisition included the following: Cash payment P1,400,000 Broker’s fee 80,000 Option price paid for the land acquired 120,000 Option price for land that was not acquired 40,000 Delinquent property taxes for 2015 that was assumed and paid by Snow Company…
The Open Grill incurred the following costs in acquiring a new piece of land: Purchase price $80,000 Commissions 4,800 Liability insurance for the first year 1,200 20,000 Cost of removing existing building Sale of salvaged materials (4,000) Total costs $102,000 What is the total capitalized cost of the land? Multiple Choice O O $102,000. $80,000. $100,800. $106,000.
On December 1, 20120, Boyd Co. purchased a 400,000 tract of land for a factory site. Boyd razed an old building on the property and sold the materials it salvaged from the demolition. Boyd incurred additional costs and realized salvage proceeds during December 2010 as follows: Demolition of old building 50,000.00 Legal fees for purchase contract and recording ownership 10,000.00 Title guarantee insurance 12,000.00 12,000.00 Proceeds from sale of salvaged materials In its December 31, 2010 balance sheet, Boyd should report a balance in the land account of 442,000 460,000 422,000 464,000
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On March 1, 2018, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2018. Costsincurred during this period are listed below:Demolition of old building $ 4,000Architect’s fees (for new building) 12,000Legal fees for title investigation of land 2,000Property taxes on land (for period beginning March 1, 2018) 3,000Construction costs 500,000Interest on construction loan 5,000Salvaged materials resulting from the demolition of the old building were sold for $2,000.Required:Determine the amounts that Beldon should capitalize as the cost of the land and the new building.
In 2014, Nana Company purchased property with natural resources for P12,400,000. The property was relatively close to a large city and had an expected residual value of P3,000,000. However, P1,200,000 will have to be spent to restore the land for use. The following information relates to the use of the property: - In 2014, Nana spent P800,000 in develpment cost and P600,000 in building on the property. Nana does not anticipate that the building will have any utility after the natural resources are depleted. - In 2015 and 2017, P600,000 and P1,600,000 respectively were spent for additional development on the mine - The tonnage mined and estimated remaining tons for years 2014-2018 are as follow: Year Ton Extracted Estimated Tons Remaining 2014 - 5,000,000 2015 1,500,000 3,500,000 2016 1,800,000 2,000,000 2017 1,700,000 900,000 2018 900,000 0 Based on the preceding information, calculate the depletion and depreciation for 2015? Depletion Depreciation a. 3,600,000 180,000 b.…
On January 1, 2020, Williamsburg Inc. acquired a piece of land to construct a manufacturing plant. You have the following information about this transaction: $240,000 4% of price $5,000 Price of land Tax on transfer of land Legal free to transfer property of land to Williamsburg $6,000 $1,000 $860,000 $2,100 $6,400 Cost of demolishing old building on the land Income from scrap that was sold of old building Cost of manufacturing building construction Cost of insurance during construction Cost of annual insurance on manufacturing building after the construction is finished Cost to repair a piece of equipment used in the $1,000 factories construction Management decided to allocate the following amounts to the parts of the factory building, and estimated the corresponding useful lives and residual values as follows: Allocated cost Useful life Residual value Allocated Cost Useful Life Residual Value $20,000 $1,000 $0 $4,000 $10,000 Windows 10 years $20,000 $100,000 Furnace 10 years…
Current Attempt in Progress Marigold Corp. acquires land for $100000 cash. Additional costs are as follows: Removal of shed Filling and grading Residual value of lumber from shed Paving of parking lot Closing costs Type here to search $430 $104890. O $100000. O$104460. O $120690. 3300 Marigold will record the cost of the land as 150 15500 1310 C P 5 59 -4°C Clear 4) ENG 10: 2022
E10-6 Acquisition of Land and Building On February 1, 2019, Edwards Corporation purchased a parcel of land as a factory site for $100,000. It demolished an old building on the property and began construction on a new building that was completed on October 2, 2019. Costs incurred during this period are: Demolition of old building $8,000 Architect’s fees $25,000 Legal fees for title investigation and purchase contract $4,000 Construction costs $650,000 Edwards sold salvaged materials resulting from the demolition for $2,000. Required: 1. At what amount should Edwards record the cost of the land and the new building, respectively? 2. Next Level If management misclassified a portion of the building’s cost as part of the cost of the land, what would be the effect on the financial statements?

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