Two independent companies, Ball and Brown, are in the home building business. Each owns a tract of land for development, b ut each company would prefer to build on the other's land. Accordingly, the agree to exchange their land. An appraiser was hir ed, and from the report and the companies records, the following information was obtained: Ball Co.'s Land Brown Co.'s Land Cost (same as book value) 800,000 500,000 Market value, per appraisal 1,000,000 900,000 The exchange of land was made and based on the difference in appraised values, Brown paid P100,000 cash to Ball.

Two independent companies, Ball and Brown, are in the home building business. Each owns a tract of land for development, b ut each company would prefer to build on the other's land. Accordingly, the agree to exchange their land. An appraiser was hir ed, and from the report and the companies records, the following information was obtained: Ball Co.'s Land Brown Co.'s Land Cost (same as book value) 800,000 500,000 Market value, per appraisal 1,000,000 900,000 The exchange of land was made and based on the difference in appraised values, Brown paid P100,000 cash to Ball.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $221,567. Focus Company initially offered to buy the land for $181,076. The companies settled on a purchase price of $209,946. On the same day, another piece of land on the same block sold for $231,997. Under the cost concept, at what amount should the land be recorded in the accounting records of Focus Company? Oa. $221,567 Ob. $231,997 Oc. $209,946 Od. $181,076
poin(s) possible Eastwood Properties bought three lots in a subdivision for a lump-sum price. An independent appraiser valued the lots as follows: E (Click the icon to view the values.) Eastwood paid $265,000 in cash. Record the purchase in the journal, identifying each lot's cost in a separate Land account. Round decimals to two places, and use the computed percentages throughout. (Record a single compound journal entry. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) ... Date Accounts and Explanation Debit Credit Land-Lot 1 Land-Lot 2 Land-Lot 3 Data table Cash To record sale of lots. Lot Appraised Value Lot 1 2$ 202,500 Lot 2 225,000 Lot 3 22,500 Print Done
Two construction companies, Harglo and Kalman, are in the construction business. Each owns a tract of land being held for development, but each company would prefer to build on the other's land. Accordingly, they agree to exchange their land, and have the following information: Harglo's Kalman's Land Land Cost and book value $150,000 $100,000Fair value based upon appraisal $200,000 $160,000 The exchange of land was made, and, based on the difference in appraised fair value, Kalman paid $40,000 cash to Harglo. For financial reporting purposes, Harglo would recognize a gain on this exchange in the amount of $6,000 After the exchange, Harglo would record its newly acquired land on its books ata. $120,000b. $102,000c. $136,000d. $166,000
MAGANDANGEHEMPLO, Inc. obtained a land with an old building, that will be accounted for under property, plant and equipment. The Company intends to demolish the old building, to build a new building and will not use the old building prior to its demolition. The following information relates to the land and building: Purchase price of the land and building P3,500,000 Fair value: Land 3,000,000 Old building 2,000,000 Historical cost Land 2,000,000 Old building 6,000,000 Demolition costs 700,000 Construction cost of the new building…
-determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building -would the company recognize a gain on the purchase? -record the purchase in a horizontal statements model -record the purchase in general journal format
jagdish
Chico Company paid $600,000 for a basket purchase that included office furniture, a building and land. An appraiser provided the following estimates of the market values of the assets if they had been purchased separately: Office furniture, $160,000; Building, $500,000; and Land, $130,000. Based on this information, what is the cost that should be allocated to the office furniture? Note: Round intermediate percentage values to a whole percentage. Multiple Choice $235,562 $66,500 $160,000 $120,000
Merchant Company purchased land for a building site. The costs associated with the property were: Purchase price Real estate commissions Legal fees Expenses of clearing the land What is the total recorded cost of the land? $ 184,000 15,900 1,700 2,900
Which of the following are the capitalized coats of the land and the new building, respectively?
Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $ 811,000 cash. The land was appraised at $223, 836 and the building at $708,814. Required a. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. b. Would the company recognize a gain on the purchase? c. Record the purchase in a horizontal statements model. d . Record the purchase in general journal format.
The Chicago Corporation acquired a piece of land in a business combination transaction from the Milwaukee Corporation, an unrelated company. The land originally cost $750,000 when purchased by Milwaukee Corporation. The fair value of the land has subsequently been considered by Chicago Corporation for two different purposes, one as a site for a storage facility and the other as site for a grocery store. If the land is used to develop as a storage facility the fair value was estimated to be $1,000,000 and alternatively, the land for the grocery store is estimated to be $1,250,000. The land is currently zoned for both purposes. Chicago Corporation intends to use the property to develop as a storage facility. Which value should the Chicago Corporation use in its financial statements for the land? (do not use dollar signs, commas or decimals in your answer) What fair value principle did you use to determine the fair value?
“P” and “Q” entered into a joint venture to construct a house for a price of L 8,00,000. For this purpose “P” put L 2,00,000 and “Q” L 1,50,000 into joint bank A/c opened for this purpose.The payments as follows :Materials L 60,000Salary & wages L 1,40,000 Plant & Machinery L 20,000These payments were made from joint bank A/c, but in addition “P” supplied cement bags valued L10,000. The house was constructed and paid the contract price.The plant and machinery taken over by “Q” @ L 10,000 and unused materials was taken by “P” @ L 5,000. They shared the profit in the ratio of 2:1.Show 1) Joint venture A/c2) Joint Bank A/c3) Co-ventures A/c answer with all work please