Answered: Ion Co. purchased land for $190,000.…

Ion Co. purchased land for $190,000. lon also paid $5,000 in real estate commissions, $1,000 in legal fees, and $500 in title insurance fees. lon should record the cost of this land at:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Al Madinah Co. purchases land for RO 90,000 cash. The company paid RO 11,600 in property taxes. The…

A: Calculate the cost of land:

Q: Prepare your answers using excel or clearly written computations. Show your work for maximum points.…

A: Introduction: A mortgage is a loan in which the lender is safeguarded against default by the…

Q: Joaquin purchased a $235,000 crane for a construction business. The crane was sold for $175,000…

A: Capital gain or loss refers to the difference between the sale price of a capital asset and its…

Q: A company purchases a new building for $500,000. They pay $100,000 in cash and finance the remainder…

A: The objective of this question is to understand how to record the acquisition of a building and land…

Q: Year 0 1 2 Recognized Gain

A: The installment method of revenue recognition is applied when the sale value is paid in…

Q: According to the income approach, this transaction would be recorded as a A. $60,000 increase in…

A: The transactions get recorded as income approach, expenditure approach and product approach. We will…

Q: Joaquin purchased a $235,000 crane for a construction business. The crane was sold for $175,000…

A: Book value or carrying value of crane = Cost - accumulated depreciation Gain or loss on sale of…

Q: Barney Stinson purchased land and a building for his new men’s clothing store. The price paid was…

A: Historical cost of the building = Total Purchase cost for land and a building x fair value of the…

Q: Blossom Company purchased real estate for $1,165,000, which included $6,200 in legal fees. It paid…

A: The procedure of entering business transactions for the first time in the books of accounts is known…

Q: Russell Corporation sold a parcel of land valued at $425,000. Its basis in the land was $297,500.…

A: A realised gain happens when an asset is traded for more than it cost to buy it. Gains that have…

Q: Bran pays an adviser $1,000 to help manage his investments and provide investment advice. The…

A: Deductions are allowed on taxable income, by tax laws to reduce tax burdens of tax payers. To…

Q: On April 1st, Leo

A: Any residential rental property placed in service after 1986 is depreciated using the…

Q: Werner's Fish House purchases a tract of land and an existing building for $870,000. The company…

A: When any land and building is purchased, initial expenditure is incurred to clean the land, tear…

Q: Following is the alphabetized account information. Assume all the accounts have normal balances.…

A: Unadjusted trial balance includes both temporary accounts and permanent accounts. All expenses,…

Q: John has a rental property that has rental income of $22,000 and operating expenses of Mortgage…

A: Income tax: The fee charged by the government of the country on the taxable income of the citizens…

Q: Required information [The following information applies to the questions displayed below.] Russell…

A: Sale value of asset means value for which asset is being sold out. Basis in asset means adjusted…

Q: 2) Thompson Glacier Limited purchased a tract of land and contracted with a commercial developer to…

A: Trees and Shrubs , lighting around the parking area , pavement of parking lot , security fence are…

Q: How much investment interest can Tobias deduct?

A: Given in the question:Total Interest Expense = $37,600Municipal Interest Income = $75,200Taxable…

Q: Northstar industries purchases land for $175,500 cash. The title and attorney fees totaled $1000.…

A: The question is based on the concept of Business Accounting.

Q: Kip purchased a rental house for $250,000 which included the land portion of $50,000. At closing, he…

A: DEPRECIATION EXPENSEDepreciation means gradual decrease in value of assets due to normal wear and…

Q: Javier purchased a building, including the land it was on, to assemble his new equipment. The total…

A: SOLUTION DEPRECIATION MEANS THE MONETARY VALUE OF AN ASSET DECREASE OVER TIME DUE TO USE , WEAR AND…

Q: ng the year, Irv had the following transactions: Long-term loss on the sale of business use…

Q: Fox River LLC owns a 160 - unit multifamily apartment complex in Charlotte, NC. The value allocated…

A: ParticularsaAnnual Depreciation$ 669090.90bNumber of years useful life (United States)27.50c =…

Q: On January 1 Coopers Industries bought a parcel of land for use in its operations by paying the…

A: A phrase used in accounting for assets and property that might not be easily turned into cash is…

Q: BE9.1 (LO 1), AP These expenditures were incurred by Dobbin Company in purchasing land: cash price…

A: Cost of land includes purchase price, non-refundable taxes, brokerage, commission, legal fees and…

Q: What was the amount of the real estate fee?

A: The real estate fees is the charge or in other words a commission which is required to be paid by…

Q: Ken sold a rental property for $682,000. He received $186,000 in the current year and $124,000 each…

Q: Deductible amount

A: Capital expenditure are not deductible. Since land is a Capital expenditure , So purchase of land is…

Q: Rachel Weitzman's basis in investment-use land was $15,000. She received a gross condemnation award…

A: Introduction:- Calculation of unrealized gain as follows:- Unrealized gain = Net condemnation award…

Q: Julia currently is considering the purchase of some land to be held as an investment. She and the…

A: Investment refers to putting the money into the purchase of a fixed asset, property or stock for…

Q: Terry purchased a machine for $15,000; the seller is holding the note. Terry paid $2,500 for the…

A: The adjusted basis is computed by taking the original cost, adding the installation charges and…

Q: Russell Corporation sold a parcel of land valued at $442,500. Its basis in the land was $274,350.…

A: Realized gain results in when an asset is sold at a higher price than its cost price. This amount is…

Q: John’s uncle donated a truck to his company, John’s Corporation. The truck had an original cost of…

A: The objective of the question is to determine the correct journal entry to record the donation of a…

Q: Robertson Company exchanged a machine for some land. The machine had cost $17,000, was 70%…

A: Depreciation expense: Depreciation is a method of reducing the capitalized cost of long-lived…

Q: On December 1, 20X0, AKE Pte Ltd paid $5,000 to a Real Estate consulting company for a market report…

A: Accounting Standards are the principles which are accepted and adapted by the users of accounting…

Q: KNB sold real property to Firm P for $15,000 cash and Firm P’s assumption of the $85,000 mortgage on…

A: Calculation of KNB’s amount realized on the sale: KNB’s amount realized on the sale = Cash + Relief…

Question

Ion Co. purchased land for $190,000. Ion also paid $5,000 in real estate commissions, $1,000 in legal fees, and $500 in title insurance fees. lon should record the
cost of this land at:

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduce to cost of asset

VIEW

Step 2: Working for cost of land

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Amos, Inc. puchased land for $55,000 cash. They also incurred commissions of $ 1,650, property taxes of $6,000, and title insurance of $500. The $6,000 in property taxes includes $4,000 in back taxes paid by Amos, Inc. on behalf of the seller and $ 2,000 due for the current year after the purchase date. Amos also paid a contractor $ 10,000 to tear down a dilapidated building on the property. The capitalized cos of the land is: A. $61, 150 B. $73, 150 C.$ 71, 150 D. $70,650
Terry purchased a machine for $15,000; the seller is holding the note. Terry paid $2,500 for the required wiring and installation. Terry has deducted depreciation on the machine for 3 years totaling $4,500. Terry owes $5,000 to the Seller. What is Terry’s adjusted basis in the machine? Group of answer choices
Dorothy and John Hufffschneider listed their house and lot for sale with C. B. Property. The asking price was $165,000, and the owners told C. B. that the size of the property was 6.8 acres. Dean Olson, a salesman for C. B., advertised the property in local newspapers as consisting of six acres. James and Jean Holcomb signed a contract to purchase the property through Olson after first inspecting the property with Olson and being assured by Olson that the property was at least 6.6 acres. The Holcombs never asked for or received a copy of the survey. In actuality, the lot was only 4.6 acres. The Holcombs now seek to rescind the contract. Decision?
Tobias has a brokerage account and buys on the margin, which resulted in an interest expense of $29,200 during the year. Income generated through the brokerage account was as follows: Municipal interest $58,400 Taxable dividends and interest 292,000 If required, round any division to two decimal places and use in subsequent computation. Round your final answer to the nearest dollar. How much investment interest can Tobias deduct?
Sebastian purchases two pieces of equipment for $100,000. Appraisals of the equipment indicate that the fair market value of the first piece of equipment is $72,000 and that of the second piece of equipment is $108,000. What is Sebastian's basis in these two assets? Do not round your interim calculations. If required, round your final answers to the nearest dollar. Sebastian's basis for the first piece of equipment is $____ and $_______ for the second piece of equipment.
Jos is a Sales Manager. He uses his own car to travel to various locations. He acquired the car on 1 October 2021 for $60,000. The acquisition cost was funded entirely by a loan at an interest rate of 15%. He has determined that the depreciation deduction on the car would be $2,300 for the year. In addition, Jos incurred the following expenses during the year: Registration and insurance = $2,000; Repairs and maintenance = $1,000; and Oil and fuel costs = $1,500. For the period 1 October 2021 to 30 June 2022, Jos estimates that the car travelled 15,000 kilometres, 12,000 of which were for business purposes. You may assume that Jos has maintained all necessary records and a logbook. Required: Calculate Jos's deduction for car expenses under the two methods (cent per kilometre rate 0.72 and logbook) in Div 28 of Income Tax Assessment Act 1997. Assume that depreciation has been adjusted for part-year use and the impact of the car limit
Cayden Purchased the following for his rental real estate business: An apartment building; he paid $103,500 for the building ( not including the value of the land). Furniture for $8,649. Pickup truck for $27,500, used for 75% business. What is Cayden's total unadjusted basis immediately after acquisition (UBIA) of these assets? 1) $29,274 2) $112,149 3) $132,774 4) $139,649
1