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On March 31, 2020, Capital Investment Advisers paid $4,620,000 for land with two buildings on it. The plan was to demolish Building 1 and build a new store (Building 3) in its place. Building 2 was to be used as a company office and was appraised at a value of $982,380. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $608,140. Without considering the buildings or improvements, the tract of land was estimated to have a value of $3,087,480. Capital incurred the following additional costs: Cost to demolish Building 1 Cost of additional landscaping Cost to construct new building (Building 3) Cost of new land improvements near Building 2 (Land Improvements 2) Required: 1. Allocate the costs incurred by Capital to the appropriate columns and total each column. Purchase price Demolition Landscaping New building New improvements Totals $ Land Building 2 05 OS Building 3 $ 718,160 274,520 0$ 3,244,400 255,600 Land Land Improvements 1 Improvements 2

On March 31, 2020, Capital Investment Advisers paid $4,620,000 for land with two buildings on it. The plan was to demolish Building 1 and build a new store (Building 3) in its place. Building 2 was to be used as a company office and was appraised at a value of $982,380. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $608,140. Without considering the buildings or improvements, the tract of land was estimated to have a value of $3,087,480. Capital incurred the following additional costs: Cost to demolish Building 1 Cost of additional landscaping Cost to construct new building (Building 3) Cost of new land improvements near Building 2 (Land Improvements 2) Required: 1. Allocate the costs incurred by Capital to the appropriate columns and total each column. Purchase price Demolition Landscaping New building New improvements Totals $ Land Building 2 05 OS Building 3 $ 718,160 274,520 0$ 3,244,400 255,600 Land Land Improvements 1 Improvements 2

FINANCIAL ACCOUNTING
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 31, 2020, Capital Investment Advisers paid $4,620,000 for land with two buildings on it. The plan was to demolish Building 1 and build a new store (Building 3) in its place. Building 2 was to be used as a company office and was appraised at a value of $982.380. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $608,140. Without considering the buildings or improvements, the tract of land was estimated to have a value of $3,087,480. Capital incurred the following additional costs: Cost to demolish Building 1 Cost of additional landscaping Cost to construct new building (Building 3) Cost of new land improvements near Building 2 (Land Improvements 2) Required: 1. Allocate the costs incurred by Capital to the appropriate columns and total each column. Purchase price Demolition Landscaping New building New improvements Totals $ Land 0 $ Building 2 0 $ Building 3. Land Improvements 1 Improvements 2. 0 $ $ 718,160 274,520 3,244,400 255,600 0 $ 0
Transcribed Image Text:On March 31, 2020, Capital Investment Advisers paid $4,620,000 for land with two buildings on it. The plan was to demolish Building 1 and build a new store (Building 3) in its place. Building 2 was to be used as a company office and was appraised at a value of $982.380. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $608,140. Without considering the buildings or improvements, the tract of land was estimated to have a value of $3,087,480. Capital incurred the following additional costs: Cost to demolish Building 1 Cost of additional landscaping Cost to construct new building (Building 3) Cost of new land improvements near Building 2 (Land Improvements 2) Required: 1. Allocate the costs incurred by Capital to the appropriate columns and total each column. Purchase price Demolition Landscaping New building New improvements Totals $ Land 0 $ Building 2 0 $ Building 3. Land Improvements 1 Improvements 2. 0 $ $ 718,160 274,520 3,244,400 255,600 0 $ 0
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