On March 1, 2025, Blossom Supply Companyacquired real estate, on which it planned toconstruct a small office buildingby paying $80,000 in cashAn old warehouse on the propertywas demolished at a cost of $8,000; the salvagedmaterials were sold for $2,000. Additionalexpenditures before construction beganincluded $1,400 attorney's fee for workconcerning the land purchase, $5,400 real estatebroker's fee$9,000 architect's fee, and $15,000 toput in driveways and a parking lot.

To determine the amount to be reported as the cost of the land, we need to consider all the expenses…

Answered: On March 1, 2025, Blossom Supply…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On March 1, 2024, Beldon Corporation purchased land as a factory site for $72,000. 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 $ 5,000 11,000 8,000 4,200 620,000 6,000 Salvaged materials resulting from the demolition of the old building were sold for $3,200. 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…
On April 7, 2024, Crane Corporation purchased two excavators at auction for a combined total cost of $338,000. The excavators were listed in the auction catalogue at $138,000 for excavator A and $284,000 for excavator B. Immediately after the auction, Crane had the excavators professionally appraised so it could purchase adequate insurance coverage. The appraisal put a fair value of $112,520 on excavator A and $275,480 on excavator B. On April 10, Crane paid a total of $4,000 in transportation charges for the two excavators. On April 28, Crane paid $9,000 for improvements to excavator B and no further expenditures were made for excavator A. On April 30, 2024, both excavators were ready to be used. The company expects excavator A to last eight years and to have a residual value of $7,800 when it is removed from service, and it expects excavator B to be useful for six more years and have a residual value of $19,300 at that time. Due to the different characteristics of the two excavators,…
On March 1, 2027, Crane Company acquired real estate, on which it planned to construct a small office building, by paying $86,500 in cash. An old warehouse on the property was demolished at a cost of $9,500; the salvaged materials were sold for $1,960. Additional expenditures before construction began included $1,460 attorney's fee for work concerning the land purchase, $5,150 real estate broker's fee, $8,960 architect's fee, and $15,300 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of land $ 115950
In fiscal 2023, Swifty Realty Corporation purchased unimproved land for $57,000. The land was improved and subdivided into building lots at an additional cost of $35,100. These building lots were all the same size but, because of differences in location, were offered for sale at different prices, as follows: Group 1 2 3 Number of Lots Group 1 Group 2 Group 3 10 16 24 Operating expenses that were allocated to this project totalled $19,300 for the year. At year end, there were also unsold lots remaining, as follows: 5 lots 7 lots 4 lots Price per Lot Year-end inventory $3,410 4,400 2,350 Determine the year-end inventory and net income of Swifty Realty. Ignore income taxes. (Do not round intermediate calculations. Round final answers to O decimal places, eg. 5,275.) Net income/(Loss) $ 29472 49500
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 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?
Farley Corporation purchased land adjacent to its plant to improve access for trucks making deliveries. Expenditures incurred in purchasing the land were as follows: purchase price, $70,000; broker's fees, $6,000; title search and other fees, $5,000; demolition of an old building on the property, $5,700; grading $1,200; digging foundation for the road, $3,000; laying and paving driveway. $25,000; lighting $7,500; signs, $1,500. List the items and amounts that should be included in the Land account. $ $
In 2021, the Marion Company purchased land containing a mineral mine for $1,740,000. Additional costs of $676,000 were incurred to develop the mine. Geologists estimated that 400,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $116,000. To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $184,000. These structures have a useful life of 10 years. The structures cannot be moved after the ore has been removed and will be left at the site. In addition, new equipment costing $96,000 was purchased and installed at the site. Marion does not plan to move the equipment to another site, but estimates that it can be sold at auction for $4,000 after the mining project is completed. In 2021, 60,000 tons of ore were extracted and sold. In 2022, the estimate of total tons of ore in the mine was revised from 400,000 to 451,000. During 2022, 96,000 tons were extracted. Required: 1. Compute…
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
7) Crass Spray Inc. (CSI) purchased equipment costing $60,000 on September 1, 2023. CSI made a $20,000 down payment and took out a loan for the remaining amount. Other cash expenditures related to this purchase included: Insurance during shipping: $500 Annual insurance policy: $2,400 Installation and testing costs: $600 Staff training costs on how to run the new equipment: $700 Required Determine the cost of the new equipment and record all required journal entries related to this equipment (you can ignore depreciation expense for the year).
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
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.

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS