On March 31, 2023, Capital Investment Advisers paid $4,570,000 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 $1,074.790. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $607.490. Without considering the buildings or improvements, the tract of land was estimated to have a value of $2,990,720. 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 Land Building 2 Building 3 $703,160 272,020 2,476,000 254,600 Land Land Improvements 1 Improvements 2
On March 31, 2023, Capital Investment Advisers paid $4,570,000 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 $1,074.790. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $607.490. Without considering the buildings or improvements, the tract of land was estimated to have a value of $2,990,720. 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 Land Building 2 Building 3 $703,160 272,020 2,476,000 254,600 Land Land Improvements 1 Improvements 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![On March 31, 2023, Capital Investment Advisers paid $4,570,000 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
$1,074,790. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $607,490. Without considering
the buildings or improvements, the tract of land was estimated to have a value of $2,990,720. 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
View transaction list
$
Land
Journal entry worksheet
< 1
Record costs of plant assets.
Date
Mar 31
0 $
Note: Enter debits before credits.
Building 2
0 $
General Journal
Building 3
2. Prepare a single journal entry dated March 31, 2023, to record all the incurred costs, assuming they were paid in cash on that date.
Debit
Land
Land
Improvements 1 Improvements 2
0 $
$ 703,160
272,020
2,476,000
254,600
Credit
S
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F35d6937f-3bf8-4105-aff5-208aaeb45659%2F51a7c419-8b3a-4413-bb39-03e2c31ecb24%2Ff2q0aqp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On March 31, 2023, Capital Investment Advisers paid $4,570,000 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
$1,074,790. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $607,490. Without considering
the buildings or improvements, the tract of land was estimated to have a value of $2,990,720. 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
View transaction list
$
Land
Journal entry worksheet
< 1
Record costs of plant assets.
Date
Mar 31
0 $
Note: Enter debits before credits.
Building 2
0 $
General Journal
Building 3
2. Prepare a single journal entry dated March 31, 2023, to record all the incurred costs, assuming they were paid in cash on that date.
Debit
Land
Land
Improvements 1 Improvements 2
0 $
$ 703,160
272,020
2,476,000
254,600
Credit
S
0
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