Cost of land site, which included an old apartment building appraised at $75,000 $173,000 Legal Fees, including fee for the title search 2, 100 Payment of apartment building mortgage and related interest due at time of sale 9,300 Payment for delinquent property taxes assumed by the purchaser 6,000 Cost of razing the apartment building 17,000 Proceeds from sale of salvaged materials (3,800) Grading to establish proper drainage flow on land site 2, 100 Architect’s fees on new building 300, 000 Proceeds from sales of excess dirt to owner of adjoining property (2,000) Payment to building contractor 5,000,000 Payment of medical bills of employee accidentally injured 1, 600 Special assessment for paving city sidewalks (paid to city) 18,000 Cost of paving driveway and parking lot 25,000 Cost of installing lights in the parking lot 9,500 Premium for insurance on building during construction 7,800 Cost of open house party to celebrate opening of new building 8,000
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
P9-1A
Acquisition Cost of Long-Lived Assets
The following items represent expenditures (or receipts) related to the construction of a new home office for Lowery Company.
Cost of land site, which included an old apartment building appraised at $75,000 $173,000
Legal Fees, including fee for the title search 2, 100
Payment of apartment building mortgage and related interest due at time of sale 9,300
Payment for delinquent property taxes assumed by the purchaser 6,000
Cost of razing the apartment building 17,000
Proceeds from sale of salvaged materials (3,800)
Grading to establish proper drainage flow on land site 2, 100
Architect’s fees on new building 300, 000
Proceeds from sales of excess dirt to owner of adjoining property (2,000)
Payment to building contractor 5,000,000
Payment of medical bills of employee accidentally injured 1, 600
Special assessment for paving city sidewalks (paid to city) 18,000
Cost of paving driveway and parking lot 25,000
Cost of installing lights in the parking lot 9,500
Premium for insurance on building during construction 7,800
Cost of open house party to celebrate opening of new building 8,000
Calculate the proper balances for the Land, Building, and Land Improvements accounts of Lowery Company.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
