McCoy's Fish House purchases a tract of land and an existing building for $880,000. The company plans to remove the old buildingand construct a new restaurant on the site. In addition to the purchase price, McCoy pays closing costs, including title insurance of$1,800. The company also pays $11,600 in property taxes, which includes $7,800 of back taxes (unpaid taxes from previous years) paidby McCoy on behalf of the seller and $3,800 due for the current fiscal year after the purchase date. Shortly after closing, the companypays a contractor $44,000 to tear down the old building and remove it from the site. McCoy is able to sell salvaged materials from theold building for $6,800 and pays an additional $11,900 to level the land.Required:Determine the amount McCoy's Fish House should record as the cost of the land. (Amounts to be deducted should be indicated by aminus sign.)Total cost of the land

Cost of Land: The cost of land includes the following costs: Purchase price of land Attorney…

Answered: McCoy's Fish House purchases a tract of…

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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On March 1, 2021, Sage Hill Company acquired real estate on which it planned to construct a small office building. The company paid $100,000 in cash. An old warehouse on the property was razed at a cost of $7,900; the salvaged materials were sold for $1,800. Additional expenditures before construction began included $1,400 attorney's fee for work concerning the land purchase, $4,100 real estate broker's fee, $8,200 architect's fee, and $13,600 to put in driveways and a parking lot. Determine the amount to be reported as the cost of the land. Cost of the land $
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
On June 1, 2025, Oriole Company sells $185,000 of shelving units to a local retailer, Blue Spruce, which is planning to expand its stores in the area. Under the agreement, Blue Spruce asks Oriole to retain the shelving units at its factory until the new stores are ready for installation. Title passes to Blue Spruce at the time the agreement is signed. The shelving units are delivered to the stores on September 1, 2025, and Blue Spruce pays in full. Prepare the journal entries for this bill-and-hold arrangement (assuming that conditions for recognizing the sale as a bill-and-hold sale have been met) for Oriole on June 1 and September 1, 2025. The cost of the shelving units to Oriole is $89,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the…
Keating Co. is considering disposing of equipment with a cost of $74,000 and accumulated depreciation of $51,800. Keating Co. can sell the equipment through a broker for $33,000, less a 7% broker commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $49,000. Keating will incur repair, insurance, and property tax expenses estimated at $12,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is Oa. $4,417 Ob. $7,572 Oc. $9,465 Od. $6,310 Previous Next 7:36 PM 12/13/2020 CP DELL
Everett Company purchased land and a modern office building on March 1, 20-1 for a combined price of $600,000. $400,000 was paid in cash with the remainder owing on a 5% note payable. The land had a cost of $350,000 and the building had a net book value of $100,000 on the seller's books. The land and building had fair market values of $390,000 and $210,000, respectively on March 1. Everett made the following entry at acquisition?
On March 1, 2025, Wildhorse Co. acquired real estate, on which it planned to construct a small office building, by paying $80,000 in cash. An old warehouse on the property was demolished at a cost of $8,200; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,200 attorney's fee for work concerning the land purchase, $4,500 real estate broker's fee, $8,700 architect's fee, and $14,000 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of the land $
On January 1, 2020, Tom Co (A seller-lessee) sells a building to MacCo (an unrelated buyerlessor) for cash of $2,000,000. The fair value of the building at that time is $1,800,000; the carrying amount immediately before the transaction is $1,000,000. At the same time, TomCo enters into a contract with MacCo for the right to use the building for 19 years, with annual payments of $120,000 payable at the end of each year. The interest rate implicit in the lease is 4.5%, which results in a present value of the annual payments of $1,459,200. The transfer of the asset to MacCo has been assessed as meeting the definition of a sale under PSAK 72. Discuss the implication of the transactions and state the journal entries on January 1, 2020
On March 1, 2022, Wildhorse Company acquired real estate, on which it planned to construct a small office building, by paying $98,000 in cash. An old warehouse on the property was demolished at a cost of $ 11,000; the salvaged materials were sold for $ 3,100. Additional expenditures before construction began included $ 2,000 attorney's fee for work concerning the land purchase, $ 6,300real estate broker's fee, $ 10,800 architect's fee, and $ 18,200 to put in driveways and a parking lot. Determine the amount to be reported as the cost of the land. Cost of the land $ enter the Cost of the land in dollars
Keating Co. is considering disposing of equipment with a cost of $66,000 and accumulated depreciation of $46,200. Keating Co. can sell the equipment through a broker for $32,000, less a 5% broker commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $45,000. Keating will incur repair, insurance, and property tax expenses estimated at $9,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is
Keating Co. is considering disposing of equipment with a cost of $71,000 and accumulated depreciation of $49,700. Keating Co. can sell the equipment through a broker for $32,000 less 7% commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $47,000. Keating will incur repair, insurance, and property tax expenses estimated at $9,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is A:$5,768 B:$8,240 C:$9,888 D:$12,360
Rossy Investigations purchased land, paying $94,000 cash plus a $230,000 note payable. In Addition, Rossy Investigations paid delinquent property tax of $4,000, title insurance costing $5,000, and $4,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $440,000. It also paid $52,000 for a fence around the property, $19,000 for a sign near the entrance, and $5,000 for special lighting on the grounds. Determine the cost of the land, land improvements, and building. Account Land Land Improvements Purchase price Note payable Property tax Title insurance Remove building Construct building Fence Sign Lighting Totals Building
During its current tax year (year one), a pharmaceutical company purchased a mixing tank that had a fair market price of $125,000. It replaced an older, smaller mixing tank that had a BV of $20,000. Because a special promotion was underway, the old tank was used as a trade-in for the new one, and the cash price (including delivery and installation) was set at $102,000. The MACRS class life for the new mixing tank is 9.5 years. If 200% DB depreciation had been applied to this problem, what would be the accumulative depreclation through the end of year four Select one: O a. $21,984 O b. $47,601.09 O C. $21,081.6 O d. $23,424

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