Determining asset cost and recording partial-year depreciationSafe Parking, near an airport, incurred the following costs to acquire land, make land improvements, and construct and furnish a small building:Safe Parking depreciates land improvements over 15 years, buildings over 40 years, and furniture over 10 years, all on a straight-line basis with zero residual value.RequirementsSet up columns for Land, Land Improvements, Building, and Furniture. Show how to account for each cost by listing the cost under the correct account. Determine the total cost of each asset.All construction was complete and the assets were placed in service on September 1. Record partial-year depreciation expense for the year ended December 31. Round to the nearest dollar. Purchase price of three acres of land$ 85,000a.b. Delinquent real estate taxes on the land to be paid by Safe Parking6,300C.Additional dirt and earthmoving3,400d. Title insurance on the land acquisition3,400e. Fence around the boundary of the propertyf. Building permit for the buildingg. Architect's fee for the design of the building9,60090020,100h. Signs near the front of the property9,000i. Materials used to construct the buildingj. Labor to construct the building217,000172,000k. Interest cost on construction loan for the building9,5001. Parking lots on the property29,400m. Lights for the parking lots11,600n. Salary of construction supervisor (80% :o building; 20% to parkinglot and concrete walks)80,000o. Furniture11,700p. Transportation of furniture from seller to the building1,900q. Additional fencing6,900

1. Item Land Land improvements Building Furniture a 85,000 b…

Answered: Purchase price of three acres of land $…

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

Question

Determining asset cost and recording partial-year depreciation

Safe Parking, near an airport, incurred the following costs to acquire land, make land improvements, and construct and furnish a small building:

Safe Parking depreciates land improvements over 15 years, buildings over 40 years, and furniture over 10 years, all on a straight-line basis with zero residual value.

Requirements

Set up columns for Land, Land Improvements, Building, and Furniture. Show how to account for each cost by listing the cost under the correct account. Determine the total cost of each asset.
All construction was complete and the assets were placed in service on September 1. Record partial-year depreciation expense for the year ended December 31. Round to the nearest dollar.

Purchase price of three acres of land
$ 85,000
a.
b. Delinquent real estate taxes on the land to be paid by Safe Parking
6,300
C.
Additional dirt and earthmoving
3,400
d. Title insurance on the land acquisition
3,400
e. Fence around the boundary of the property
f. Building permit for the building
g. Architect's fee for the design of the building
9,600
900
20,100
h. Signs near the front of the property
9,000
i. Materials used to construct the building
j. Labor to construct the building
217,000
172,000
k. Interest cost on construction loan for the building
9,500
1. Parking lots on the property
29,400
m. Lights for the parking lots
11,600
n. Salary of construction supervisor (80% :o building; 20% to parking
lot and concrete walks)
80,000
o. Furniture
11,700
p. Transportation of furniture from seller to the building
1,900
q. Additional fencing
6,900

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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