Kirsh Corporation purchased land as a factory site and contracted with Heathercote Construction to construct a factory. Kirsh made the following expenditures related to the acquisition of the land, building, and equipment for the factory: Purchase price of the land Demolition and removal of old building Clearing and grading the land before construction Various closing costs in connection with acquiring the land Architect's fee for the plans for the new building Payments to Heathercote for building construction Equipment purchased Freight charges on equipment Trees, plants, and other landscaping Installation of a sprinkler system for the landscaping Cost to build special platforms and install wiring for the equipment Cost of trial runs to ensure proper installation of the equipment Fire and theft insurance on the factory for the first year of use In addition to the above expenditures, Kirsh purchased four forklifts from the Toronto Equipment Supply Company. In payment, Kirsh paid $109,704 in cash by sending a cheque. Assets $ 1,350,000 95,000 225,000 57,000 65,000 Required: Determine the amount Kirsh would record for each of the assets acquired in the above transactions. Initial valuation Land Building Equipment 3,400,000 935,000 47,000 60,000 6,500 27,000 8,500 39,000 Land improvements Fork lifts Prepaid insurance
Kirsh Corporation purchased land as a factory site and contracted with Heathercote Construction to construct a factory. Kirsh made the following expenditures related to the acquisition of the land, building, and equipment for the factory: Purchase price of the land Demolition and removal of old building Clearing and grading the land before construction Various closing costs in connection with acquiring the land Architect's fee for the plans for the new building Payments to Heathercote for building construction Equipment purchased Freight charges on equipment Trees, plants, and other landscaping Installation of a sprinkler system for the landscaping Cost to build special platforms and install wiring for the equipment Cost of trial runs to ensure proper installation of the equipment Fire and theft insurance on the factory for the first year of use In addition to the above expenditures, Kirsh purchased four forklifts from the Toronto Equipment Supply Company. In payment, Kirsh paid $109,704 in cash by sending a cheque. Assets $ 1,350,000 95,000 225,000 57,000 65,000 Required: Determine the amount Kirsh would record for each of the assets acquired in the above transactions. Initial valuation Land Building Equipment 3,400,000 935,000 47,000 60,000 6,500 27,000 8,500 39,000 Land improvements Fork lifts Prepaid insurance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Kirsh Corporation purchased land as a factory site and contracted with Heathercote Construction to construct a factory.
Kirsh made the following expenditures related to the acquisition of the land, building, and equipment for the factory:
Purchase price of the land
Demolition and removal of old building
Clearing and grading the land before construction
Various closing costs in connection with acquiring the land
Architect's fee for the plans for the new building
Payments to Heathercote for building construction
Equipment purchased
Freight charges on equipment
Trees, plants, and other landscaping
Installation of a sprinkler system for the landscaping
Cost to build special platforms and install wiring for the equipment
Cost of trial runs to ensure proper installation of the equipment
Fire and theft insurance on the factory for the first year of use
Assets
$ 1,350,000
95,000
225,000
In addition to the above expenditures, Kirsh purchased four forklifts from the Toronto Equipment Supply Company. In payment, Kirsh
paid $109,704 in cash by sending a cheque.
Land
Building
Equipment
57,000
65,000
Required:
Determine the amount Kirsh would record for each of the assets acquired in the above transactions.
Initial valuation
Land improvements
Fork lifts
Prepaid insurance
3,400,000
935,000
47,000
60,000
6,500
27,000
8,500
39,000
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