On March 1, 2024, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished and construction began on a new building that was completed on December 15, 2024. Costs incurred during this period are listed below: Demolition of old building Architect's fees (for new building) Legal fees for title investigation of land. Property taxes on land (for period beginning March 1, 2024) Construction costs Interest on construction loan Complete this $ 4,000 12,000 2,000 3,000 Salvaged materials resulting from the demolition of the old building were sold for $2,000. Required: Determine the amounts that Beldon should capitalize as the cost of the land and the new building. he below 500,000 5,000

On March 1, 2024, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished and construction began on a new building that was completed on December 15, 2024. Costs incurred during this period are listed below: Demolition of old building Architect's fees (for new building) Legal fees for title investigation of land. Property taxes on land (for period beginning March 1, 2024) Construction costs Interest on construction loan Complete this $ 4,000 12,000 2,000 3,000 Salvaged materials resulting from the demolition of the old building were sold for $2,000. Required: Determine the amounts that Beldon should capitalize as the cost of the land and the new building. he below 500,000 5,000

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: On January 1, 2021, Company A began the construction of a building to be used as its office…

A: Under specific interest method, interest is capitalized firstly till the amount of construction loan…

Q: Wellsley Corporation purchased an old building and the land on which it is located for $70,000. The…

A: The capitalized cost is the cost of fixed assets that is reported in the balance sheet of the…

Q: On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $29,000 and…

A: Cost of land = Cash payment + Notes value + Legal fee + Taxes + Fee to remove building - Salvage…

Q: Sandhill Construction, which follows ASPE entered into a contract to construct a bridge for a…

A: The completed contract method is an accounting method used to recognize revenue and expenses for…

Q: On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as…

A: Capitalized Interest: Capitalized Interest refers to the interest charge on the acquisition of long…

Q: Revenue Gross profit (loss) GA S Answer is not complete. 2025 2024 2,800,000 2026

A: Under this method, a percentage of work completed to date is computed using the cost incurred to…

Q: In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa…

A: The question is based on the concept of Financial Accounting.In case of construction contracts…

Q: On July 1, 2024, a company purchased a $600,000 tract of land that is intended to be the site of a…

A: Land is a non-current asset of an entity. It is reported on the balance sheet. It is the only…

Q: On July 1, 2024, Jekel & Hyde Incorporated purchased land and incurred other costs relative to the…

A: Capitalized cost of asset consists of acquisition cost of asset and other costs are incurred before…

Q: On February 1, 20X1, ABC Corporation purchased a parcel of land as a factory site (unusable) for…

A: Property, Plant, and Equipment or PP&E is a classification shown on a balance sheet. It normally…

Q: Solomon Company constructed its own office building. The company had a 1,000,000 two-year 12% loan…

A: Weighted average borrowing rate = (1500, 000*10%) +(2500, 000*12%) /(1500, 000+2500, 000) = (150,…

Q: Meman

A: Cost of Building:8500(demolition of old building) - 1200(sale of salvaged material) +…

Q: In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa…

A: "Since you have posted a question with multiple sub-parts, we will solve the subparts asked by you.…

Q: During the current year, Alanna Co. had the following transactions pertaining to its new office…

A: Answer A: So, Alanna Co. should record the land in the books for $126,000.

Q: During the current year, Alanna Co. had the following transactions pertaining to its new office…

A: Land and building are the fixed assets for a company, used in production process. Though building…

Q: Determining cost of land On-Time Delivery Company acquired an adjacent lot to construct a new…

A: The cost of land includes the purchase price, taxes, other costs to make land ready for use. The…

Q: What value should be assigned to the tract of land? $Answer What value should be assigned to the…

A: Cost assignment refers to the process which is used by the company to allocate the cost of product…

Q: Soccer Wholesale purchased land and a warehouse for one price of $850,000. In addition to the…

A: cost of land = cost of land and warehouse purchased + brokers commission + title insurance +…

Q: On July 1, 2024, Jekel & Hyde Incorporated purchased land and incurred other costs relative to the…

A: Assets are the resources owned by the entity. These are of two types; current and non-current.…

Q: On January 6, Year 1, Mount Jackson Corporation purchased a tract of land for a factory site for…

A: Land and Building are fixed assets however the treatment of both with regard to depreciation is…

Q: In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa…

A: Construction contracts are necessary to keep communication between all parties engaged in a project…

Q: On January 1, 2021, the Blackstone Corporation purchased a tract of land (site number 11) with a…

A: Requirement 1: Land Account [Site number 11]ParticularsAmount ($)Acquisition cost760,000Real estate…

Q: On March 1, 2021, Beldon Corporation purchased land as a factory site for $71,000. An old building…

A: The cost of fixed assets is to be capitalized as the fixed assets are used by business for long time…

Q: On March 1, 2024, Beldon Corporation purchased land as a factory site for $72,000. An old building…

A: Step 1:Computation of the capitalized cost of land:Capitalized cost of land: Purchase…

Question

100%

S
On March 1, 2024, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished,
and construction began on a new building that was completed on December 15, 2024. Costs incurred during this period are listed
below:
Demolition of old building
Architect's fees (for new building)
Legal fees for title investigation of land
Property taxes on land (for period beginning March 1, 2024)
Construction costs
Interest on construction loan
Salvaged materials resulting from the demolition of the old building were sold for $2,000.
Required:
Determine the amounts that Beldon should capitalize as the cost of the land and the new building.
Complete this question by entering your answers in the tabs below.
Cost of Land
Cost of New
Building
Determine the amounts that Beldon should capitalize as the cost of the new building.
Note: Amounts to be deducted should be indicated with a minus sign.
Capitalized cost of building:
Total cost of building
$ 4,000
12,000
2,000
3,000
500,000
5,000
$
0

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: Introduction

VIEW

Step 2: Calculation for capitalized cost of land

VIEW

Step 3: Calculation for capitalized cost of building

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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

On March 1, 2025, Blossom Supply Company acquired real estate, on which it planned to construct a small office buildingby paying $ 80,000 in cashAn old warehouse on the property was demolished at a cost of $8,000; the salvaged materials were sold for $2,000. Additional expenditures before construction began included $1,400 attorney's fee for work concerning the land purchase, $5,400 real estate broker's fee$9,000 architect's fee, and $15,000 to put in driveways and a parking lot.
What is the initial value of land?
Accounting In early 2019, ETI incurred significant costs to renovate two of its existing theatres in order toconvert them into Experience Plus theatres. These two theatres are located in buildings that ETIowns. Details of costs incurred to construct and promote the Experience Plus theatres are asfollows:Removal of seating $ 10,000Purchase of new seating $ 92,000Installation of new seating $ 8,000Addition of kitchen facilities $ 70,000Advertising and promotion of new theatres $200,000Interest on renovation loan $ 28,000 These costs were capitalized and added to the carrying value of the buildings. Under ASPE, should the cost be capitalized or expensed?
Dalton Construction Co. contracted to build a bridge for $10,000,000. Construction began in 2021 and was completed in 2022. Data relating to the construction are: Costs incurred during the year Estimated costs to complete Dalton uses the percentage-of-completion method. 2021 $3,300,000 2,700,000 2022 $2,750,000 Instructions (a) How much revenue should be reported for 2021? Show your computation. (b) Make the entry to record progress billings of $4,100,000 during 2021. (c) Make the entry to record the revenue and gross profit for 2021. (d) How much gross profit should be reported for 2022? Show your computation.
On January 1, 2021, LMT Inc. acquired a piece of land to construct a new office building. You have the following information about this transaction: Price of land $180,000 Tax on purchase of land 5% of price Legal fees to transfer property of land to LMT $4,500 Cost of demolishing old building on land 5,600 Income from sale of windows of old building demolished 500 Cost of new office building foundation 23,400 Cost of office building construction 460,000 Cost of insurance during construction 2,000 Cost to repair a piece of equipment used in the office building’s construction 1,000 Cost of annual insurance on office building after the construction is finished 6,000 LMT management decided to allocate the following amounts to the parts of the office building, and estimated the corresponding useful lives and residual values as follows: Allocated cost Useful life Residual value Windows $50,000 10 years…
On March 1, 2024, Beldon Corporation purchased land as a factory site for $66,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2024. Costs incurred during this period are listed below: Demolition of old building Architect's fees (for new building) Legal fees for title investigation of land Property taxes on land (for period beginning March 1, 2024) Construction costs Interest on construction loan $ 7,000 18,000 5,000 3,600 560,000 8,000 Salvaged materials resulting from the demolition of the old building were sold for $2,600. Required: Determine the amounts that Beldon should capitalize as the cost of the land and the new building. Complete this question by entering your answers in the tabs below. Cost of Land Cost of New Building Determine the amounts that Beldon should capitalize as the cost of the land. Note: Amounts to be deducted should be indicated with a minus sign. Capitalized cost of land: Total…
Dog
On July 1, 2024, a company purchased a $550,000 tract of land that is intended to be the site of a new office complex. The company incurred additional costs and realized salvage proceeds during 2024 as follows: Demolition of existing building on site $ 72,000 Legal and other fees to close escrow 12,400 Proceeds from sale of demolition scrap 9,800 What would be the balance in the land account as of December 31, 2024?
Determine the Cost of Land Village Delivery Company purchased a lot to construct a new warehouse for $243,000, paying $28,000 in cash and giving a short-term note for the remainder. Legal fees paid in connection with the purchase were $2,075, delinquent taxes assumed were $12,300, and fees paid to remove an old building from the land were $17,400. Materials salvaged from the demolition of the building were sold for $4,100. A contractor was paid $823,800 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet. X
Determining the Cost of an AssetOmar Corporation paid $200,000 for a tract of land that had an old gas station on it. The gas station was demolished at a cost of $20,000 and a new warehouse was constructed on the site at a cost of $550,000. In addition, several other costs were incurred: Legal fees (associated with the purchase of the land) $35,000 Architect fees (associated with the new warehouse) $42,000 Interest on the construction loan (for the new warehouse) $18,000 (a) What value should be assigned to the tract of land? $Answer (b) What value should be assigned to the new warehouse? $Answer
On January 1, 2020, Sunland Company purchased land for an office site by paying $2680000 cash. Sunland began construction on the office building on January 1. The following expenditures were incurred for construction: Date Expenditures January 1, 2020 $ 1780000 April 1, 2020 2530000 May 1, 2020 4490000 June 1, 2020 4720000 The office was completed and ready for occupancy on July 1. To help pay for construction, and purchase of land $3650000 was borrowed on January 1, 2020 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2020 was a $1400000, 12%, 6-year note payable dated January 1, 2020. Assume the weighted-average accumulated expenditures for the construction project are $4300000. The amount of interest cost to be capitalized during 2020 is $441750. $387000. $496500. $406500...
China Express purchased land for $140,000. Prior to construction on the new building, the land had to be cleared of trees and brush. Construction costs incurred during the first year are listed below: Land clearing costs $ 5,000 Architect fees (for new building) 30,000 Legal fees for title investigation of land 1,000 Property taxes on land (for the first year) 2,500 Building construction costs 440,000 Required:Determine the amounts that should be recorded in the land and the new building accounts.