Finley Company is looking for a new office location and sees a building with a fair value of $720,000. Finley also notices that much of the equipment in the existing building would be useful to its own operations. Finley estimates the fair value of the equipment to be $112,000. Finley offers to buy both the building and the equipment for $770,000, and the offer is accepted. Determine the amounts Finley should record in the separate accounts for building and equipment. (Do not round Intermediate calculations.) Building Equipment Total

Finley Company is looking for a new office location and sees a building with a fair value of $720,000. Finley also notices that much of the equipment in the existing building would be useful to its own operations. Finley estimates the fair value of the equipment to be $112,000. Finley offers to buy both the building and the equipment for $770,000, and the offer is accepted. Determine the amounts Finley should record in the separate accounts for building and equipment. (Do not round Intermediate calculations.) Building Equipment Total

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 10MC

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Finley Company is looking for a new office location and sees a building with a fair value of $740,000. Finley also notices that much of the equipment in the existing building would be useful to its own operations. Finley estimates the fair value of the equipment to be $114,000. Finley offers to buy both the building and the equipment for $790,000, and the offer is accepted. Determine the amounts Finley should record in the separate accounts for building and equipment. (Do not round intermediate calculations.)
Finley Co. is looking for a new office location and sees a building with a fair value of $400,000. Finley also notices that much of the equipment in the existing building would be useful to its own operations. Finley estimates the fair value of the equipment to be $80,000. Finley offers to buy both the building and the equipment for $450,000, and the offer is accepted. Determine the amounts Finley should record in the separate accounts for building and equipment.
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Citation Builders, Inc., builds office buildings and single-family homes. The office buildings are constructedunder contract with reputable buyers. The homes are constructed in developments ranging from 10–20 homesand are typically sold during construction or soon after. To secure the home upon completion, buyers must paya deposit of 10% of the price of the home with the remaining balance due upon completion of the house andtransfer of title. Failure to pay the full amount results in forfeiture of the down payment. Occasionally, homesremain unsold for as long as three months after construction. In these situations, sales price reductions are usedto promote the sale.During 2018, Citation began construction of an office building for Altamont Corporation. The total contractprice is $20 million. Costs incurred, estimated costs to complete at year-end, billings, and cash collections for thelife of the contract are as follows:2018 2019 2020Costs incurred during the year $ 4,000,000 $…
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Citation Builders, Incorporated, builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 10-20 homes and are typically sold during construction or soon after. To secure the home upon completion, buyers must pay a deposit of 10% of the price of the home with the remaining balance due upon completion of the house and transfer of title. Failure to pay the full amount results in forfeiture of the down payment. Occasionally, homes remain unsold for as long as three months after construction. In these situations, sales price reductions are used to promote the sale. During 2024, Citation began construction of an office building for Altamont Corporation. The total contract price is $16 million. Costs incurred, estimated costs to complete at year-end, billings, and cash collections for the life of the contract are as follows: Costs incurred during the year Estimated costs…
Citation Builders, Incorporated, builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 10-20 homes and are typically sold during construction or soon after. To secure the home upon completion, buyers must pay a deposit of 10% of the price of the home with the remaining balance due upon completion of the house and transfer of title. Failure to pay the full amount results in forfeiture of the down payment. Occasionally, homes remain unsold for as long as three months after construction. In these situations, sales price reductions are used to promote the sale. During 2024, Citation began construction of an office building for Altamont Corporation. The total contract price is $18 million. Costs incurred, estimated costs to complete at year-end, billings, and cash collections for the life of the contract are as follows: Costs incurred during the year Estimated costs…
Foremost Manufacturing wants to buy $50,000 of sheet metal from Ore Industries on credit. Before agreeing to the sale, Ore decides to evaluate Foremost’s financial status. Of the following potential findings, which would lead Ore to refuse to sell the metal on credit? Foremost’s current liabilities are $450,000 and its current assets are $475,000. Foremost’s accounts receivable are $22,000 and its accounts payable are $21,000. Foremost’s current assets are $450,000 and its current liabilities are $475,000. Foremost’s accounts payable are $22,000 and its accounts receivable are $21,000.
You have an opportunity to acquire a property from First Capital Bank. The bank recently obtained the property from a borrower who defaulted on his loan. First Capital is offering the property for $218,000. If you buy the property, you believe that you will have to spend (1) $10,800 on various acquisition-related expenses and (2) an average of $2,300 per month during the next 12 months for repair costs, and so on, in order to prepare it for sale. Because First Capital Bank would like to sell the property as soon as possible, it is willing to provide $198,000 in financing at 4.25 percent interest for 12 months payable monthly (interest only). Your market research indicates that after you repair the property, it may sell for about $248,000 at the end of one year. Furthermore, you will probably have to pay about $3,300 in fees and selling expenses in order to sell the property at that time. Required: a. If you wanted to earn a 20 percent returi compounded monthly, do you believe that this…
Mott Company purchases a machine from Janelle Company. Installation of the machine requires specialized knowledge that Mott Company does not possess. Janelle Company regularly includes installation as part of its sales contracts. The machine has a stand-alone price of $50,000, and the value of the installation is estimated to be $5,000. Mott agrees to purchase the machine for $50,000. How much of the contract price should be allocated to the machine and installation respectively?