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Sheffield Landscaping began construction of a new plant on December 1,2020. On this date, the company purchased a parcel of land for $144,000 in cash. In addition, it paid $2,640 in surveying costs and $3,840 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $960 being received from the sale of materials. Architectural plans were also formalized on December 1, 2020, when the architect was paid $39,600. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2021 as follows.

Sheffield Landscaping began construction of a new plant on December 1,2020. On this date, the company purchased a parcel of land for $144,000 in cash. In addition, it paid $2,640 in surveying costs and $3,840 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $960 being received from the sale of materials. Architectural plans were also formalized on December 1, 2020, when the architect was paid $39,600. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2021 as follows.

FINANCIAL ACCOUNTING
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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Sheffield Landscaping began construction of a new plant on December 1, 2020. On this date, the company purchased a parcel of land for $144,000 in cash. In addition, it paid $2,640 in surveying costs and $3,840 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $960 being received from the sale of materials. Architectural plans were also formalized on December 1, 2020, when the architect was paid $39,600. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2021 as follows. Date of Payment Amount of Payment March 1 $256,800 May 1 333,600 July 1 62,400 The building was completed on July 1, 2021. To finance construction of this plant, Sheffield borrowed $612.000 from the bank on December 1, 2020. Sheffield had no other borrowings. The $612,000 was a 10-year loan bearing interest at 8%. Compute the balance in each of the following accounts at December 31, 2020, and December 31, 2021. (Round answers to O decimal places, eg. 5,275.) December 31, 2020 December 31, 2021 (a) Balance in Land Account (b) Balance in Building (c) Balance in Interest Expense
Transcribed Image Text:Sheffield Landscaping began construction of a new plant on December 1, 2020. On this date, the company purchased a parcel of land for $144,000 in cash. In addition, it paid $2,640 in surveying costs and $3,840 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $960 being received from the sale of materials. Architectural plans were also formalized on December 1, 2020, when the architect was paid $39,600. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2021 as follows. Date of Payment Amount of Payment March 1 $256,800 May 1 333,600 July 1 62,400 The building was completed on July 1, 2021. To finance construction of this plant, Sheffield borrowed $612.000 from the bank on December 1, 2020. Sheffield had no other borrowings. The $612,000 was a 10-year loan bearing interest at 8%. Compute the balance in each of the following accounts at December 31, 2020, and December 31, 2021. (Round answers to O decimal places, eg. 5,275.) December 31, 2020 December 31, 2021 (a) Balance in Land Account (b) Balance in Building (c) Balance in Interest Expense
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