Required: 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from the dropdown list for each letter and enter the appropriate amount. Enter receipts as negative amounts using the minus sign. Account Amount Item a. b. d. f. 9- h. i. j. k. I. m. O. P. S. Land Land Land Land Land Land Building Building Land Other Accounts Other Accounts Land Improvements Land Improvements Land Improvements Other Accounts Other Accounts Building Building Building 2. Determine the amount debited to Land, Land Improvements, and Building. Land Land Improvements Building 3. Since land used as a plant site does not are, therefore, depreciated lose its ability to provide services, it is not depreciated. Land improvements do lose their ability to provide services as time passes 4. What would be the effect on the current year's income statement and balance sheet if the cost of filling and grading land of $16,000 [payment (i)] was incorrectly classified as Land Improvements rather Land? Assume that Land Improvements are depreciated over a 20-year life using the double-declining-balance method. Depreciation expense would be overstated & Land improvements would be overstated. -✓
Required: 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from the dropdown list for each letter and enter the appropriate amount. Enter receipts as negative amounts using the minus sign. Account Amount Item a. b. d. f. 9- h. i. j. k. I. m. O. P. S. Land Land Land Land Land Land Building Building Land Other Accounts Other Accounts Land Improvements Land Improvements Land Improvements Other Accounts Other Accounts Building Building Building 2. Determine the amount debited to Land, Land Improvements, and Building. Land Land Improvements Building 3. Since land used as a plant site does not are, therefore, depreciated lose its ability to provide services, it is not depreciated. Land improvements do lose their ability to provide services as time passes 4. What would be the effect on the current year's income statement and balance sheet if the cost of filling and grading land of $16,000 [payment (i)] was incorrectly classified as Land Improvements rather Land? Assume that Land Improvements are depreciated over a 20-year life using the double-declining-balance method. Depreciation expense would be overstated & Land improvements would be overstated. -✓
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Allocating Payments and Receipts to Fixed Asset Accounts
The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are
identified by an asterisk.
a. Fee paid to attorney for title search
b. Cost of real estate acquired as a plant site: Land
C.
Delinquent real estate taxes on property, assumed by purchaser
Cost of tearing down and removing building acquired in (b)
e. Proceeds from sale of salvage materials from old building
f. Special assessment paid to city for extension of water main to the property
g. Architect's and engineer's fees for plans and supervision
h. Premium on one-year insurance policy during construction
i. Cost of filling and grading land
d.
j.
k.
I.
m.
n.
0.
P.
q.
r.
Building (to be demolished)
S.
Money borrowed to pay building contractor
Cost of repairing windstorm damage during construction
Cost of paving parking lot to be used by customers
Cost of trees and shrubbery planted
Cost of floodlights installed on parking lot
Cost of repairing vandalism damage during construction
Proceeds from insurance company for windstorm and vandalism damage
Payment to building contractor for new building
Interest incurred on building loan during construction
Refund of premium on insurance policy (h) canceled after 11 months
$2,800
291,400
27,700
16,400
4,600
2,700*
10,900
40,100
3,900
16,000
683,400*
5,000
13,800
8,200
900
2,300
5,500*
728,600
34,200
325*
![Required:
1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from the dropdown list for each letter and enter the
appropriate amount. Enter receipts as negative amounts using the minus sign.
Item
Account
a.
b.
C.
d.
e.
f.
9.
h.
i.
j.
k.
I.
m.
0.
P.
9.
r.
S.
Land
Land
Land
Land
Land
Land
Building
Building
Land
✔
Building
Building
Building
✔
✔
Other Accounts
Other Accounts
Land Improvements
Land Improvements
Land Improvements
Other Accounts
Other Accounts
✔
$
3. Since land used as a plant site does not
are, therefore, depreciated
$
$
$
$
$
$
$
$
$
Amount
2. Determine the amount debited to Land, Land Improvements, and Building.
Land
Land Improvements
Building
✔lose its ability to provide services, it is not ✔ depreciated. Land improvements do
✔ lose their ability to provide services as time passes and
4. What would be the effect on the current year's income statement and balance sheet if the cost of filling and grading land of $16,000 [payment (i)] was incorrectly classified as Land Improvements rather than
Land? Assume that Land Improvements are depreciated over a 20-year life using the double-declining-balance method.
Depreciation expense would be overstated & Land improvements would be overstated.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa989bf88-dd22-46b8-852d-ab08e70d9b28%2F539a6ce8-4808-4faf-8c30-98d2b0dd4bb2%2F55uf0l_processed.png&w=3840&q=75)
Transcribed Image Text:Required:
1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from the dropdown list for each letter and enter the
appropriate amount. Enter receipts as negative amounts using the minus sign.
Item
Account
a.
b.
C.
d.
e.
f.
9.
h.
i.
j.
k.
I.
m.
0.
P.
9.
r.
S.
Land
Land
Land
Land
Land
Land
Building
Building
Land
✔
Building
Building
Building
✔
✔
Other Accounts
Other Accounts
Land Improvements
Land Improvements
Land Improvements
Other Accounts
Other Accounts
✔
$
3. Since land used as a plant site does not
are, therefore, depreciated
$
$
$
$
$
$
$
$
$
Amount
2. Determine the amount debited to Land, Land Improvements, and Building.
Land
Land Improvements
Building
✔lose its ability to provide services, it is not ✔ depreciated. Land improvements do
✔ lose their ability to provide services as time passes and
4. What would be the effect on the current year's income statement and balance sheet if the cost of filling and grading land of $16,000 [payment (i)] was incorrectly classified as Land Improvements rather than
Land? Assume that Land Improvements are depreciated over a 20-year life using the double-declining-balance method.
Depreciation expense would be overstated & Land improvements would be overstated.
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