Shaun Pollok purchased a car wash for $480,000. If purchased separately, the land would have cost $120,000, the building $270,000, and the equipment $210,000. Determine the amount that should be recorded in the new business’s records for land, building, and equipment.
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Shaun Pollok purchased a car wash for $480,000. If purchased separately, the land would have cost $120,000, the building $270,000, and the equipment $210,000. Determine the amount that should be recorded in the new business’s records for land, building, and equipment.
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- Determining the Cost of an AssetOmar Corporation paid $200,000 for a tract of land that had an old gas station on it. The gas station was demolished at a cost of $20,000 and a new warehouse was constructed on the site at a cost of $550,000. In addition, several other costs were incurred: Legal fees (associated with the purchase of the land) $35,000 Architect fees (associated with the new warehouse) $42,000 Interest on the construction loan (for the new warehouse) $18,000 (a) What value should be assigned to the tract of land? $Answer (b) What value should be assigned to the new warehouse? $AnswerPointer Company buys a piece of property in north Toronto that has the following costs associated with the purchase: Invoice price for land and building = $303,500 Legal fees associated with the purchase = $12,000 Unpaid property taxes assumed by Pointer as part of the purchase agreement = $28,000 Cost of having property professionally appraised = $10,350 The appraisal report shows the building has an appraised market value of $400,000 and the land has an appraised value of $100,000. Required 1: What amount should be capitalized as the value of the land on Pointer's book? $ Required 2: What amount should be capitalized as the value of the building on Pointer's book? $ Required 3: If the property acquired will be depreciated in 40 years with no residual value (assume the straight-line depreciation is used), what is the depreciation expense for the first full year of use? $China Express purchased land for $140,000. Prior to construction on 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 $ 5,000 Architect fees (for new building) 30,000 Legal fees for title investigation of land 1,000 Property taxes on land (for the first year) 2,500 Building construction costs 440,000 Required:Determine the amounts that should be recorded in the land and the new building accounts.
- For the following transactions, prepare the entries that would be recorded in the general fixed assets account group for the city of Evert.a. The city purchased property costing $1,300,000, with three-fourths of the cost allocated to a building.b. A mansion belonging to the great-granddaughter of the city’s founder was donated to the city. The land cost the original owner $600, and the house was built for an additional $50,000. At the time of donation, the property had an estimated fair value of $550,000, of which $330,000 was allocable to the land. The property was accepted and is to be used as a park and a museum.c. A central fire station, financed by general obligation bonds, was two-thirds complete at yearend with costs to date of $800,000 that were recorded in the capital project fund.d. A new fire engine was purchased for $165,000. The city traded a used fire engine originally purchased for $100,000. The trade-in value was $25,000. Both engines were purchased from general…On March 1, 2021, Sage Hill Company acquired real estate on which it planned to construct a small office building. The company paid $100,000 in cash. An old warehouse on the property was razed at a cost of $7,900; the salvaged materials were sold for $1,800. Additional expenditures before construction began included $1,400 attorney's fee for work concerning the land purchase, $4,100 real estate broker's fee, $8,200 architect's fee, and $13,600 to put in driveways and a parking lot. Determine the amount to be reported as the cost of the land. Cost of the land $On November 10 of year 1, Javier purchased a building, including the land it was on, to assemble his new equipment. The total cost of the purchase was $1,200,000; $300,000 was allocated to the basis of the land and the remaining $900,000 was allocated to the basis of the building. a) Assume the building was purchased and placed in service on March 3 instead of November 10. Using MACRS, what is Javier's depreciation deduction on the building for years 1 through 3? b) Assume the building is residential property. Using MACRS, what is Javier's depreciation deduction on the building for years 1 through 3?c) What would be the depreciation for 2022, 2023, and 2024 if the property were nonresidential property purchased and placed in service November 10, 2005 (assume the same original basis)?
- Texas Co. purchased land as a factory site for $1,500,000. Texas paid $200,000 to tear down two buildings on the land. Legal fees of $10,000 were paid for title investigation and making the purchase. Architect's fees were $40,000. Title insurance cost $5,000, and liability insurance during construction cost $4,000. Excavation cost $20,000. The contractor was paid $4,000,000. An assessment made by the city for pavement was $20,000. Interest costs during construction were $200,000. The cost of the land that should be recorded by Texas Co. is?On March 1, 2025, Wildhorse Co. acquired real estate, on which it planned to construct a small office building, by paying $80,000 in cash. An old warehouse on the property was demolished at a cost of $8,200; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,200 attorney's fee for work concerning the land purchase, $4,500 real estate broker's fee, $8,700 architect's fee, and $14,000 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of the land $A company purchased land for $91000 cash. Real estate brokers' commission was $6000 and $6900 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land would be recorded at O $69000. O $103900. O $91000. O $109900.
- Millbourne corporation has acquired a property that includes both land and a building for $550,000. The corporation hired an appraiser who has determined that the market value of the land is $350,000 and that of the building is $480,000, at what amount should the corporation record the cost of land? A) $147,000 B) $363,000 C) $231,000 D) $275,000 On March 1, 2022, Wildhorse Company acquired real estate, on which it planned to construct a small office building, by paying $98,000 in cash. An old warehouse on the property was demolished at a cost of $ 11,000; the salvaged materials were sold for $ 3,100. Additional expenditures before construction began included $ 2,000 attorney's fee for work concerning the land purchase, $ 6,300real estate broker's fee, $ 10,800 architect's fee, and $ 18,200 to put in driveways and a parking lot. Determine the amount to be reported as the cost of the land. Cost of the land $ enter the Cost of the land in dollarsAuto purchased a $500,000 tract of land that is intended to be the site of a new office complex. The company incurred additional costs and realized salvage proceeds as follows: Demolilitipn of existing building on site: $75,000 Legal and other fees to close escrow: $15,000 Proceeds from sale of demolition scrap: $10,000 What would be the cost of land? A. $500,000 B. $575,000 C. $580,000 D. $590,000