Teradene Corporation purchased land as a factory site and contracted with Maxtor Construction to construct a factory. Teradene made the following expenditures related to the acquisition of the land, building, and equipment for the factory: Purchase price of the land Demolition and removal of old building Clearing and grading the land before construction Various closing costs in connection with acquiring the land Architect's fee for the plans for the new building Payments to Maxtor for building construction Equipment purchased Freight charges on equipment Trees, plants, and other landscaping Installation of a sprinkler system for the landscaping Cost to build special platforms and install wiring for the equipment Cost of trial runs to ensure proper installation of the equipment Fire and theft insurance on the factory for the first year of use Assets In addition to the above expenditures, Teradene purchased four forklifts from Caterpillar. In payment, Teradene paid $29,000 cash and signed a noninterest-bearing note requiring the payment of $83,000 in one year. An Interest rate of 6% properly reflects the time value of money for this type of loan. Land Building Equipment $ 1,330,000 93,000 215,000 55,000 63,000 Required: Determine the amount Teradene would record for each of the assets acquired in the above transactions. Note: Use tables, Excel, or a financial calculator. Round your final answers to the nearest whole dollar. (FV of $1. PV of $1, FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Land improvements Fork lifts Prepaid insurance 3,380,000 925,000 45,000 58,000 6,300 Initial valuation 25,000 8,300 37,000
Teradene Corporation purchased land as a factory site and contracted with Maxtor Construction to construct a factory. Teradene made the following expenditures related to the acquisition of the land, building, and equipment for the factory: Purchase price of the land Demolition and removal of old building Clearing and grading the land before construction Various closing costs in connection with acquiring the land Architect's fee for the plans for the new building Payments to Maxtor for building construction Equipment purchased Freight charges on equipment Trees, plants, and other landscaping Installation of a sprinkler system for the landscaping Cost to build special platforms and install wiring for the equipment Cost of trial runs to ensure proper installation of the equipment Fire and theft insurance on the factory for the first year of use Assets In addition to the above expenditures, Teradene purchased four forklifts from Caterpillar. In payment, Teradene paid $29,000 cash and signed a noninterest-bearing note requiring the payment of $83,000 in one year. An Interest rate of 6% properly reflects the time value of money for this type of loan. Land Building Equipment $ 1,330,000 93,000 215,000 55,000 63,000 Required: Determine the amount Teradene would record for each of the assets acquired in the above transactions. Note: Use tables, Excel, or a financial calculator. Round your final answers to the nearest whole dollar. (FV of $1. PV of $1, FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Land improvements Fork lifts Prepaid insurance 3,380,000 925,000 45,000 58,000 6,300 Initial valuation 25,000 8,300 37,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Teradene Corporation purchased land as a factory site and contracted with Maxtor Construction to construct a factory. Teradene made
the following expenditures related to the acquisition of the land, building, and equipment for the factory:
Purchase price of the land
Demolition and removal of old building
Clearing and grading the land before construction
Various closing costs in connection with acquiring the land
Architect's fee for the plans for the new building
Payments to Maxtor for building construction
Equipment purchased
Freight charges on equipment
Trees, plants, and other landscaping
Installation of a sprinkler system for the landscaping
Cost to build special platforms and install wiring for the equipment
Cost of trial runs to ensure proper installation of the equipment
Fire and theft insurance on the factory for the first year of use
Assets
In addition to the above expenditures, Teradene purchased four forklifts from Caterpillar. In payment, Teradene paid $29,000 cash and
signed a noninterest-bearing note requiring the payment of $83,000 in one year. An Interest rate of 6% properly reflects the time value
of money for this type of loan.
Land
Building
Equipment
$ 1,330,000
93,000
215,000
55,000
63,000
Required:
Determine the amount Teradene would record for each of the assets acquired in the above transactions.
Note: Use tables, Excel, or a financial calculator. Round your final answers to the nearest whole dollar. (FV of $1, PV of $1. FVA of $1,
PVA of $1, FVAD of $1 and PVAD of $1)
Land improvements
Fork lifts
Prepaid insurance
3,380,000
925,000
Initial valuation
45,000
58,000
6,300
25,000
8,300
37,000
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