Fresh Veggies, Incorporated (FVI), purchases land and a warehouse for $490,000. In addition to the purchase price, FVI makes following expenditures related to the acquisition: broker's commission, $29,000; title insurance, $1,900; and miscellaneous closi costs, $6,000. The warehouse is immediately demolished at a cost of $29,000 in anticipation of building a new warehouse. Determine the cost of the land and record the purchase (assuming cash was paid for all expenditures). (If no entry is required fo particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the purchase of the land. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general Journal

Fresh Veggies, Incorporated (FVI), purchases land and a warehouse for $490,000. In addition to the purchase price, FVI makes following expenditures related to the acquisition: broker's commission, $29,000; title insurance, $1,900; and miscellaneous closi costs, $6,000. The warehouse is immediately demolished at a cost of $29,000 in anticipation of building a new warehouse. Determine the cost of the land and record the purchase (assuming cash was paid for all expenditures). (If no entry is required fo particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the purchase of the land. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general Journal

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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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Fresh Veggies, Incorporated (FVI), purchases land and a warehouse for $490,000. In addition to the purchase price, FVI makes the
following expenditures related to the acquisition: broker's commission, $29,000; title insurance, $1,900; and miscellaneous closing
costs, $6,000. The warehouse is immediately demolished at a cost of $29,000 in anticipation of building a new warehouse.
Determine the cost of the land and record the purchase (assuming cash was paid for all expenditures). (If no entry is required for a
particular transaction/event, select "No Journal Entry Required" in the first account field.)
View transaction list
Journal entry worksheet
Record the purchase of the land.
Note: Enter debits before credits.
Transaction
1
Record entry
General Journal
Clear entry
Debit
Credit
View general Journal

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