JT Company purchased land as a factory site. An old building on the property was demolished, and construction began on a new building. Costs incurred during the first year are listed below: $500,000 2,500,000 50,000 40,000 7,000 5,000 36,500 7,000 Land purchased as a factory site Building construction costs Interest cost related to the construction Demolition of old building Title investigation of land Property taxes on land (for the next year) Architect fees (for new building) Sale of salvaged materials How much of the "property taxes on the land for the next year" should be capitalized in the Land account? 2. How should the "sale of salvaged materials" be recorded? A. As an added cost of the land B. As a reduction of the cost of the land C. As an added cost to the building D. As a reduction of the cost of the building 3. S What amount should be recorded to the Land account? 4. S What amount should be recorded to the Building account?

JT Company purchased land as a factory site. An old building on the property was demolished, and construction began on a new building. Costs incurred during the first year are listed below: $500,000 2,500,000 50,000 40,000 7,000 5,000 36,500 7,000 Land purchased as a factory site Building construction costs Interest cost related to the construction Demolition of old building Title investigation of land Property taxes on land (for the next year) Architect fees (for new building) Sale of salvaged materials How much of the "property taxes on the land for the next year" should be capitalized in the Land account? 2. How should the "sale of salvaged materials" be recorded? A. As an added cost of the land B. As a reduction of the cost of the land C. As an added cost to the building D. As a reduction of the cost of the building 3. S What amount should be recorded to the Land account? 4. S What amount should be recorded to the Building account?

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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