The following cases are independent. Case A Starling Ltd. bought a building for $1,270,000. Before using the building, the following expenditures were made: Repair and renovation of building $ 120,000 Construction of new paved driveway 28,700 Upgraded landscaping 5,200 Wiring 17,300 Deposits with utilities for connections 3,000 Sign for front and back of building, attached to roof 13,700 Installation of fence around property 16,700 Case B Lark Company purchased a $33,700 tract of land for a new manufacturing facility. Lark demolished an old building on the property and sold the materials it salvaged from the demolition. Lark incurred additional costs and realized salvage proceeds as follows: Demolition of old building $ 32,800 Routine maintenance (mowing) done on purchase 3,000 Proceeds from sale of salvaged materials 14,450 Legal fees 9,400 Title guarantee insurance 7,100 Required: 1. What balance would Starling report in the building account? 2. What balance should Lark report in the land account? What balance should Starling report in the Land improvements account?
The following cases are independent. Case A Starling Ltd. bought a building for $1,270,000. Before using the building, the following expenditures were made: Repair and renovation of building $ 120,000 Construction of new paved driveway 28,700 Upgraded landscaping 5,200 Wiring 17,300 Deposits with utilities for connections 3,000 Sign for front and back of building, attached to roof 13,700 Installation of fence around property 16,700 Case B Lark Company purchased a $33,700 tract of land for a new manufacturing facility. Lark demolished an old building on the property and sold the materials it salvaged from the demolition. Lark incurred additional costs and realized salvage proceeds as follows: Demolition of old building $ 32,800 Routine maintenance (mowing) done on purchase 3,000 Proceeds from sale of salvaged materials 14,450 Legal fees 9,400 Title guarantee insurance 7,100 Required: 1. What balance would Starling report in the building account? 2. What balance should Lark report in the land account? What balance should Starling report in the Land improvements account?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following cases are independent.
Case A Starling Ltd. bought a building for $1,270,000. Before using the building, the following expenditures were made:
| Repair and renovation of building | $ | 120,000 |
| Construction of new paved driveway | 28,700 | |
| Upgraded landscaping | 5,200 | |
| Wiring | 17,300 | |
| Deposits with utilities for connections | 3,000 | |
| Sign for front and back of building, attached to roof | 13,700 | |
| Installation of fence around property | 16,700 | |
Case B Lark Company purchased a $33,700 tract of land for a new manufacturing facility. Lark demolished an old building on the property and sold the materials it salvaged from the demolition. Lark incurred additional costs and realized salvage proceeds as follows:
| Demolition of old building | $ | 32,800 |
| Routine maintenance (mowing) done on purchase | 3,000 | |
| Proceeds from sale of salvaged materials | 14,450 | |
| Legal fees | 9,400 | |
| Title guarantee insurance | 7,100 | |
Required: 1. What balance would Starling report in the building account?
2. What balance should Lark report in the land account? What balance should Starling report in the Land improvements account?
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