Need help with this accounting question Metlock Co. purchased land as a factory site for $456,000. The process of tearing down twoold buildings on the site and constructing the factory required 6 months.The company paid $47,880 to raze the old buildings and sold salvaged lumber and brick for$7,182. Legal fees of $2,109 were paid for the title investigation and drawing the purchasecontract. Metlock paid $2,508 to an engineering firm for a land survey and $77,520 fordrawing the factory plans. The land survey had to be made before definitive plans could bedrawn. Title insurance on the property cost $1,710, and a liability insurance premium paidduring construction was $1,026. The contractor's charge for construction was $3,123, 600.The company paid the contractor in two installments: $1,368,000 at the end of 3 months and$1,755,600 upon completion. Interest costs of $193,800 were incurred to finance theconstruction.Determine the cost of the land and the cost of the building as they should be recorded onthe books of Metlock Co. Assume that the land survey was for the building.

Step 1: Define AssetThe fixed assets are used by a company for a long period of time. The fixed…

Answered: Metlock Co. purchased land as a factory…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 7PB: Tree Lovers Inc. purchased 2,500 acres of woodland in which it intends to harvest the complete...

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Tree Lovers Inc. purchased 2,500 acres of woodland in which it intends to harvest the complete forest, leaving the land barren and worthless. Tree Lovers paid $5,000,000 for the land. Tree Lovers will sell the lumber as it is harvested and it expects to deplete it over ten years (150 acres in year one, 300 acres in year two, 250 acres in year three, 150 acres in year four, and 100 acres in year five). Calculate the depletion expense for the next five years and create the journal entry for year one.
Coronado Co. purchased land as a factory site for $496,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $52,080 to raze the old buildings and sold salvaged lumber and brick for $7,812. Legal fees of $2,294 were paid for title investigation and drawing the purchase contract. Coronado paid $2,728 to an engineering firm for a land survey, and $84,320 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $1,860, and a liability insurance premium paid during construction was $1,116. The contractor's charge for construction was $3,397,600. The company paid the contractor in two installments: $1,488,000 at the end of 3 months and $1,909,600 upon completion. Interest costs of $210,800 were incurred to finance the construction. Determine the cost of the land and the cost of the building as they should be recorded on the books of…
Sheffield Co. purchased land as a factory site for $536,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $56,280 to raze the old buildings and sold salvaged lumber and brick for $8,442. Legal fees of $2,479 were paid for title investigation and drawing the purchase contract. Sheffield paid $2,948 to an engineering firm for a land survey, and $91,120 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $2,015, and a liability insurance premium paid during construction was $1,206. The contractor's charge for construction was $3,671,600. The company paid the contractor in two installments: $1,608,000 at the end of 3 months and $2,063,600 upon completion. Interest costs of $227,800 were incurred to finance the construction. Determine the cost of the land and the cost of the building as they should be recorded on the books of…
Vaughn Co. purchased land as a factory site for $456,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months.The company paid $47,880 to raze the old buildings and sold salvaged lumber and brick for $7,182. Legal fees of $2,109 were paid for title investigation and drawing the purchase contract. Vaughn paid $2,508 to an engineering firm for a land survey, and $77,520 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $1,710, and a liability insurance premium paid during construction was $1,026. The contractor’s charge for construction was $3,123,600. The company paid the contractor in two installments: $1,368,000 at the end of 3 months and $1,755,600 upon completion. Interest costs of $193,800 were incurred to finance the construction.Determine the cost of the land and the cost of the building as they should be recorded on the books of Vaughn Co.…
Ivanhoe Co. purchased land as a factory site for $568,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $59,640 to raze the old buildings and sold salvaged lumber and brick for $8,946. Legal fees of $2,627 were paid for title investigation and drawing the purchase contract. Ivanhoe paid $3,124 to an engineering firm for a land survey, and $96,560 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $2,130, and a liability insurance premium paid during construction was $1,278. The contractor's charge for construction was $3,890,800. The company paid the contractor in two installments: $1,704,000 at the end of 3 months and $2,186,800 upon completion. Interest costs of $241,400 were incurred to finance the construction. Determine the cost of the land and the cost of the building as they should be recorded on the books of…
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Fubu Corporation purchased a 5-acre tract of land in New Albany, Ohio for a building site for $500,000. The company demolished the old building at a cost of $18,000, but was able to sell scrap from the building for $1,000. The cost of title transfer was $800 and attorney fees for reviewing the contract was $1500. Property taxes paid were $4,000, of which $450 covered the period after the purchase date. The capitalized cost of the land is:
Moby Co. purchased land costing $2,550,000 as a future factory site. Moby paid $240,000 to tear down two buildings on the land. Some Amish folks came along and paid them from the scrap lumber. They paid $2,450 cash for it. Moby paid the lawyer $4,555 in fees for the title investigation and for making the purchase. The architect's fees were $85,600. The cost for the title insurance was $4,600, and liability insurance costs during the construction phase for the factory was $12,640. The excavation cost to clear the ground for the new building was $19,450. They paid the building contractor $8,200,000. The interest costs during the construction phase of the building was $465,000. What should Moby record as cost of the land? Question options: 2,796,705 2,882,305 2,799,155 2,550,000
Your answer is partially correct. Splish Co. purchased land as a factory site for $592,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $62,160 to raze the old buildings and sold salvaged lumber and brick for $9,324. Legal fees of $2,738 were paid for title investigation and drawing the purchase contract. Splish paid $3,256 to an engineering firm for a land survey, and $100,640 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $2,220, and a liability insurance premium paid during construction was $1,332. The contractor's charge for construction was $4,055,200. The company paid the contractor in two installments: $1,776,000 at the end of 3 months and $2,279,200 upon completion. Interest costs of $251,600 were incurred to finance the construction. Determine the cost of the land and the cost of the building as they should…
(Acquisition Costs of Realty) Martin Buber Co. purchased land as a factory site for $400,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $42,000 to raze the old buildings and sold salvaged lumber and brick for $6,300. Legal fees of $1,850 were paid for title investigation and drawing the purchase contract. Martin Buber paid $2,200 to an engineering firm for a land survey, and $68,000 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insuranceon the property cost $1,500, and a liability insurance premium paid during construction was $900. The contractor’s charge for construction was $2,740,000. The company paid the contractor in two installments: $1,200,000 at the end of 3 months and $1,540,000 upon completion. Interest costs of $170,000 were incurred to finance the construction.InstructionsDetermine the cost of the land and the cost of the building…
Apple Co. purchased land as a factory site for $1,350,000. Apple paid $120,000 to tear down two buildings on the land. Salvage was sold for $8,100. Legal fees of $5,220 were paid for title investigation and making the purchase. Architect's fees were $46,800. Title insurance cost $3,600, and liability insurance during construction cost $3,900. Excavation cost $15,660. The contractor was paid $4,200,000. An assessment made by the city for pavement was $11,600. Interest costs during construction were $255,000. The cost of the land that should be recorded by Apple Co. is
Cala Manufacturing purchases land for $297,000 as part of its plans to build a new plant. The company pays $40,200 to tear down an old building on the lot and $59,426 to fill and level the lot. It also pays construction costs of $1,767,800 for the new building and $111,589 for lighting and paving a parking area. Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash.

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