The Madison Sign Company purchased land as a factory site for $72,000. Prior to construction of 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 $3,200 Sale of firewood to a worker (580) Architect fees (for new building) 12,000 Title investigation of land 1,700 Property taxes on land (for the first year) 1,200 220,000 Building construction costs Required: Determine the amounts that the company should record in the Land and the Building accounts. (Amounts to be deducted should be indicated by a minus sign.) Totals $ Land Building

The Madison Sign Company purchased land as a factory site for $72,000. Prior to construction of 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 $3,200 Sale of firewood to a worker (580) Architect fees (for new building) 12,000 Title investigation of land 1,700 Property taxes on land (for the first year) 1,200 220,000 Building construction costs Required: Determine the amounts that the company should record in the Land and the Building accounts. (Amounts to be deducted should be indicated by a minus sign.) Totals $ Land Building

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 46P

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Tree Lovers Inc. purchased 2,500 acres of woodland in which it intends to harvest the complete forest, leaving the land barren and worthless. Tree Lovers paid $5,000,000 for the land. Tree Lovers will sell the lumber as it is harvested and it expects to deplete it over ten years (150 acres in year one, 300 acres in year two, 250 acres in year three, 150 acres in year four, and 100 acres in year five). Calculate the depletion expense for the next five years and create the journal entry for year one.
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A Cost of a Fixed Asset Mist City Car Wash purchased a new brushless car-washing machine for one of its bays. The machine cost $41,700. Mist City borrowed the purchase price from its bank on a 1-year, 8% note payable. Mist City paid $975 to have the machine transported to its place of business and an additional $200 in shipping insurance. Mist City incurred the following costs as a part of the installation: During the testing process, one of the motors became defective when soap and water entered the motor because its cover had not been installed properly by Mist Citys employees. The motor was replaced at a cost of $640. Required: 1. Compute the cost of the car-washing machine. 2. CONCEPTUAL CONNECTION Explain why any costs were excluded from the cost of the machine.
The Italian Bread Company purchased land as a factory site for $70,000. An old building on the property was demolished, and construction began on a new building. Costs incurred during the first year are listed as follows:Demolition of old building $ 9,000Sale of salvaged materials (1,100)Architect fees (for new building) 20,000Legal fees (for title investigation of land) 3,000Property taxes on the land (for the first year) 4,000Building construction costs 600,000Interest costs related to the construction 23,000Required:Determine the amounts that the company should record in the Land and the Building accounts.
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The Italian Bread Company purchased land as a factory site for $63,000. An old building on the property was demolished, and construction began on a new building. Costs incurred during the first year are listed as follows: Demolition of old building $ 8,300 Sale of salvaged materials (1,000 ) Architect fees (for new building) 16,500 Legal fees (for title investigation of land) 2,300 Property taxes on the land (for the first year) 3,300 Building construction costs 530,000 Interest costs related to the construction 19,500 Required: Determine the amounts that the company should record in the Land and the Building accounts. (Amounts to be deducted should be indicated by a minus sign.)
On January Johny Corp purchased a parcel of land as a factory site for P3.2M. An old building on the property was demolished right away and construction begun on a new warehouse that was completed April 30 of the same year. Costs incurred and cash inflows for the last 2 items on the entire project are listed below: Cost of demolishing old building P280,000 Architect’s fee 317,000 Legal fee title investigation 41,000 Construction costs 9,500,000 Interest on specific borrowings 140,000 Landfill for building site…
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.
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