Sarasota Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment. Abstract company’s fee for title search $1,118 Architect’s fees 6,816 Cash paid for land and dilapidated building thereon 187,050 Removal of old building $43,000 Less: Salvage 11,825 31,175 Interest on short-term loans during construction 15,910 Excavation before construction for basement 40,850 Machinery purchased (subject to 2% cash discount, which was not taken) 118,250 Freight on machinery purchased 2,881 Storage charges on machinery, necessitated by noncompletion of building when machinery was delivered 4,687 New building constructed (building construction took 6 months from date of purchase of land and old building) 1,042,750 Assessment by city for drainage project 3,440 Hauling charges for delivery of machinery from storage to new building 1,333 Installation of machinery 4,300 Trees, shrubs, and other landscaping after completion of building (permanent in nature) 11,610 Determine the amounts that should be debited to Land, to Buildings, and to Machinery and Equipment. Assume the benefits of capitalizing interest during construction exceed the cost of implementation. Company uses net method to record discount. (Please leave spaces blank if there is no answer. Do not enter zeros in those spaces.) Land Buildings Machinery and Equipment Other Abstract fees $enter a dollar amount $enter a dollar amount $enter a dollar amount $enter a dollar amount Architect’s fees enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Cash paid for land and old building enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Removal of old building enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Interest on loans during construction enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Excavation before construction enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Machinery purchased enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Freight on machinery enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Storage charges caused by noncompletion of building enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount New building enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Assessment by city enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Hauling charges - machinery enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Installation - machinery enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Landscaping enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount $enter a total amount $enter a total amount $enter a total amount $enter a total amount

Sarasota Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment. Abstract company’s fee for title search $1,118 Architect’s fees 6,816 Cash paid for land and dilapidated building thereon 187,050 Removal of old building $43,000 Less: Salvage 11,825 31,175 Interest on short-term loans during construction 15,910 Excavation before construction for basement 40,850 Machinery purchased (subject to 2% cash discount, which was not taken) 118,250 Freight on machinery purchased 2,881 Storage charges on machinery, necessitated by noncompletion of building when machinery was delivered 4,687 New building constructed (building construction took 6 months from date of purchase of land and old building) 1,042,750 Assessment by city for drainage project 3,440 Hauling charges for delivery of machinery from storage to new building 1,333 Installation of machinery 4,300 Trees, shrubs, and other landscaping after completion of building (permanent in nature) 11,610 Determine the amounts that should be debited to Land, to Buildings, and to Machinery and Equipment. Assume the benefits of capitalizing interest during construction exceed the cost of implementation. Company uses net method to record discount. (Please leave spaces blank if there is no answer. Do not enter zeros in those spaces.) Land Buildings Machinery and Equipment Other Abstract fees $enter a dollar amount $enter a dollar amount $enter a dollar amount $enter a dollar amount Architect’s fees enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Cash paid for land and old building enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Removal of old building enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Interest on loans during construction enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Excavation before construction enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Machinery purchased enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Freight on machinery enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Storage charges caused by noncompletion of building enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount New building enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Assessment by city enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Hauling charges - machinery enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Installation - machinery enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Landscaping enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount $enter a total amount $enter a total amount $enter a total amount $enter a total amount

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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Question

Sarasota Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment.

Abstract company’s fee for title search		$1,118
Architect’s fees		6,816
Cash paid for land and dilapidated building thereon		187,050
Removal of old building	$43,000
Less: Salvage	11,825	31,175
Interest on short-term loans during construction		15,910
Excavation before construction for basement		40,850
Machinery purchased (subject to 2% cash discount, which was not taken)		118,250
Freight on machinery purchased		2,881
Storage charges on machinery, necessitated by noncompletion of
building when machinery was delivered		4,687
New building constructed (building construction took 6 months from
date of purchase of land and old building)		1,042,750
Assessment by city for drainage project		3,440
Hauling charges for delivery of machinery from storage to new building		1,333
Installation of machinery		4,300
Trees, shrubs, and other landscaping after completion of building
(permanent in nature)		11,610

Determine the amounts that should be debited to Land, to Buildings, and to Machinery and Equipment. Assume the benefits of capitalizing interest during construction exceed the cost of implementation. Company uses net method to record discount. (Please leave spaces blank if there is no answer. Do not enter zeros in those spaces.)

	Land	Buildings	Machinery and Equipment	Other
Abstract fees	$enter a dollar amount	$enter a dollar amount	$enter a dollar amount	$enter a dollar amount
Architect’s fees	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
Cash paid for land and old building	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
Removal of old building	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
Interest on loans during construction	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
Excavation before construction	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
Machinery purchased	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
Freight on machinery	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
Storage charges caused by noncompletion of building	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
New building	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
Assessment by city	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
Hauling charges - machinery	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
Installation - machinery	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
Landscaping	enter a dollar amount	enter a dollar amount	enter a dollar amount	enter a dollar amount
	$enter a total amount	$enter a total amount	$enter a total amount	$enter a total amount

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