The venus company hired an architect to design plans and a construction The Venus Company hired an architect to design plans and a construction firm to build a newoffice building on a parcel of land it owns. The following data relates to the building:Price paid to the construction firm $320,000Architect fees18,0001,200Permit feesProperty taxes during the construction period 800 Insurance premium for the first year ofoperations 3,000 Property taxes during the first year of operations 6,000 The total acquisition costof the new building is:a. $349,000.b. $340,000.c. $338,000.d. $320,000.

Step 1: Define Acquisition Cost of AssetAcquisition Cost of Asset is the purchase price of the asset…

Answered: The Venus Company hired an architect to…

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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Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is worth 100,000 and the building is worth 300,000. What cost should Utica assign to the land and to the building, respectively?
Costs to Be Included in Historical Cost Valuation. At a cost of 200,000, Assume In-N-Out Burger acquired a tract of land for a restaurant site. It paid attorneys 7,500 to conduct a title search and to prepare the required legal documents for the purchase. State real estate transfer taxes totaled 2,500. Building permits totaled 1,200. Compute the acquisition cost of the land.
Expenditures After Acquisition Listed below are several transactions: a. Paid $80 cash to replace a minor part of an air conditioning system. b. Paid $40,000 to fix structural damage to a building. c. Paid $8,000 for monthly salaries. d. Paid $12,000 to replace a manual cutting machine with a computer-controlled machine. e. Paid $1,000 related to the annual painting of a building. Required: Classify each transaction as either a revenue expenditure, a capital expenditure, or neither.
The Venus Company hired an architect to design plans and a construction firm to build a new office building on a parcel of land it owns. The following data relates to the building: Price paid to the construction firm $320,000 Architect fees 18,000 1,200 Permit fees Property taxes during the construction period 800 Insurance premium for the first year of operations 3,000 Property taxes during the first year of operations 6,000 The total acquisition cost of the new building is: a. $349,000. b. $340,000. c. $338,000. d. $320,000.
COMPASSION Company incurred the following costs at the beginning of the current year: Cost of land 1,000,000 Cost of building 4,000,000 Remodeling and repairs prior to occupancy 500,000 Escrow fee 100,000 Clearing, leveling and landfill 250,000 Property tax for period after the acquisition 150,000 Real estate commission 300,000 Required: Compute the cost of building Compute the cost of land
During the current year, Alanna Co. had the following transactions pertaining to its new office building. Purchase price of land $130,000 Legal fees for contracts to purchase land 4,000 Architech fees 16,000 Demolition of the old building on site 12,000 Sale of scrap from old building 5,000 Construction cost of new building 630,000 A. What should Alanna Co. record on its books for the land? The total cost of land includes all costs of preparing the land for use. The demolition cost of the old building is added to the land costs, and the sale of the old building scrap is subtracted from the land cost. B. What should Alanna Co. record on its books for the building?
During the current year, Bear Company had the following transactions pertaining to a new office building:Purchase price of land- 600,000Legal fees for contract to purchase land- 20,000Architect fee -80,000Demolition of old building on site to make roomfor construction of new building -50,000Sale of scrap from old building -30,000Construction cost of new building fully completed -3,500,0001. What amount should be reported as cost of land?2. What amount should be reported as cost of building?
During the current year, Alanna Co. had the following transactions pertaining to its new office building. Purchase price of land $120,000 Legal fees for contracts to purchase land 3,000 Architech fees 17,000 Demolition of the old building on site 9,000 Sale of scrap from old building 6,000 Construction cost of new building 700,000 A. What should Alanna Co. record on its books for the land? The total cost of land includes all costs of preparing the land for use. The demolition cost of the old building is added to the land costs, and the sale of the old building scrap is subtracted from the land cost. $fill in the blank 1 B. What should Alanna Co. record on its books for the building? $fill in the blank 2
COMPASSION Company incurred the following costs at the beginning of the current year: Cost of land 1,000,000 Cost of building 4,000,000 Remodeling and repairs prior to occupancy 500,000 Escrow fee 100,000 Clearing, leveling and landfill 250,000 Property tax for period after the acquisition 150,000 Real estate commission 300,000 1. compute the cost of building 2. compute the cost of land
During the current year, Alanna Co. had the following transactions pertaining to its new office building. Purchase price of land $120,000 Legal fees for contracts to purchase land 5,000 Architech fees 15,000 Demolition of the old building on site 12,000 Sale of scrap from old building 7,000 Construction cost of new building 680,000 A. What should Alanna Co. record on its books for the land? K) The total cost of land includes all costs of preparing the land for use. The demolition cost of the old building is added to the land costs, and the sale of the old building scrap is subtracted from the land cost. $1 B. What should Alanna Co. record on its books for the building?
Facetious Company incurred the following expenditures related to the construction of a new home office: Purchase price of land and an old apartment building 2,000,000 Fair value of land 1,800,000 Legal fees, including fee for title search 10,000 Payment of land mortgage and related interest due at time of sale 50,000 Payment of delinquent property taxes assumed 20,000 Cost of razing the apartment building 30,000 Grading and drainage on land site 15,000 Architect fee on new building 200,000 Payment to building contractor 8,000,000 Interest cost on specific borrowing during construction 300,000 Payment of medical bills of employees accidentally injured while inspecting building construction 10,000 Cost of paving driveway and parking lot 40,000 Cost of trees, shrubs and other landscaping 55,000 Cost of installing lights in parking lot 5,000 Premium for insurance on building during construction 25,000 Cost of open house party to celebrate opening of building 60,000 1. What is the cost…
Merchant Company purchased property for a building site. The costs associated with the property were: Purchase price $ 187,000 Real estate commissions 16,200 Legal fees 2,000 Expenses of clearing the land 3,200 Expenses to remove old building 2,200 What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

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