Problem 7-1B Determine the acquisition cost of land and building (LO7-1) The Italian Pizza Company purchased land as a factory site for $88,000. Prior to construction of 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 Sale of firewood to a worker Architect fees (for new building) Title investigation of land Property taxes on land (for the first year) Building construction costs $ 4,800 (420) 28,000 3,300 2,800 380,000
Problem 7-1B Determine the acquisition cost of land and building (LO7-1) The Italian Pizza Company purchased land as a factory site for $88,000. Prior to construction of 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 Sale of firewood to a worker Architect fees (for new building) Title investigation of land Property taxes on land (for the first year) Building construction costs $ 4,800 (420) 28,000 3,300 2,800 380,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 7-1B Determine the acquisition cost of land and building (LO7-1)
The Italian Pizza Company purchased land as a factory site for $88,000. Prior to construction of 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
Sale of firewood to a worker
Architect fees (for new building)
Title investigation of land
Property taxes on land (for the first year)
Building construction costs
Totals
Land
$ 4,800
Required:
Determine the amounts that the company should record in the land and the new building accounts. (Amounts to be deducted should
be indicated by a minus sign.)
Building
(420)
28,000
3,300
2,800
380,000
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