Whispering Landscaping began construction of a new plant on December 1, 2025. On this date, the company purchased a parcel of land for $208,500 in cash. In addition, it paid $3,000 in surveying costs and $6,000 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $4,500, with $1,500 being received from the sale of materials. Architectural plans were also formalized on December 1, 2025, when the architect was paid $45,000. The necessary building permits costing $4,500 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2026 as follows. Date of Payment March 1 May 1 July 1 The building was completed on July 1, 2026. To finance construction of this plant, Whispering borrowed $900,000 from the bank on December 1, 2025. Whispering had no other borrowings. The $900,000 was a 10-year loan bearing interest at 8%. a. Compute the balance in each of the following accounts at December 31, 2025, and December 31, 2026. b. C. Amount of Payment $360,000 495,000 Land Building 90,000 Interest expense December 31, 2025 220,500 51750 5250 December 31, 2026 220,500 1030492 56258

Whispering Landscaping began construction of a new plant on December 1, 2025. On this date, the company purchased a parcel of land for $208,500 in cash. In addition, it paid $3,000 in surveying costs and $6,000 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $4,500, with $1,500 being received from the sale of materials. Architectural plans were also formalized on December 1, 2025, when the architect was paid $45,000. The necessary building permits costing $4,500 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2026 as follows. Date of Payment March 1 May 1 July 1 The building was completed on July 1, 2026. To finance construction of this plant, Whispering borrowed $900,000 from the bank on December 1, 2025. Whispering had no other borrowings. The $900,000 was a 10-year loan bearing interest at 8%. a. Compute the balance in each of the following accounts at December 31, 2025, and December 31, 2026. b. C. Amount of Payment $360,000 495,000 Land Building 90,000 Interest expense December 31, 2025 220,500 51750 5250 December 31, 2026 220,500 1030492 56258

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

On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $32,000 in cash and giving a short-term note for $302,000. Legal fees paid were $1,580, delinquent taxes assumed were $15,200, and fees paid to remove an old building from the land were $19,100. Materials salvaged from the demolition of the building were sold for $5,000. A contractor was paid $1,015,400 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.fill in the blank 1 of 1$
Jacobson Company purchased a parcel of land for a new office building. The cost of the land was $310,000. An old building on the property wad demolished and construction began on the new building. All of this activity occurred within the same year. Costs included demolition ($37,000), architect fees on the new building design ($64,000), legal fees for land title investigation ($3,100), and construction ($768,000). At what amount should Jacobson Company record the cost the cost of the building? A B C D $768,000 $832,000 $869,000 $1,078,000
Apple Co. purchased land as a factory site for $1,350,000. Apple paid $120,000 to tear down two buildings on the land. Salvage was sold for $8,100. Legal fees of $5,220 were paid for title investigation and making the purchase. Architect's fees were $46,800. Title insurance cost $3,600, and liability insurance during construction cost $3,900. Excavation cost $15,660. The contractor was paid $4,200,000. An assessment made by the city for pavement was $11,600. Interest costs during construction were $255,000. The cost of the land that should be recorded by Apple Co. is
Texas Co. purchased land as a factory site for $1,500,000. Texas paid $200,000 to tear down two buildings on the land. Legal fees of $10,000 were paid for title investigation and making the purchase. Architect's fees were $40,000. Title insurance cost $5,000, and liability insurance during construction cost $4,000. Excavation cost $20,000. The contractor was paid $4,000,000. An assessment made by the city for pavement was $20,000. Interest costs during construction were $200,000. The cost of the land that should be recorded by Texas Co. is?
The Blowing Rock Partnership purchased land for $1,200,000 with plans to build a spa on the site. The partnership tore down several buildings on the property for $20,000. Salvaged materials with a cost of $6,000 will be repurposed in the spa. Trees were removed for $5,000 and drainage was added for $30,000. The area was fenced for $41,000. A preliminary consultation with an architect cost $2,500 and legal fees of $3,200 were paid in connection with changing the zoning of the property. What accounts will be debited for these costs? O Land, $1,249,000; Land Improvements, $41,000; Building, $5,700 O Land, $1,235,000; Land Improvements, $55,000; Architect Expense, $2,500,000; Legal Expense, $3,200 Land, $1,255,000; Land Improvements, $41,000; Building, $11,700 O Land, $1,249,000; Land Improvements, $41,000; Building, $2,500; Legal Expense, $3,200
On January 1, 2018, Monster Bar & Grill purchased a building, paying $55,000 cash and signing a $107,000 note payable. The company paid another $61,000 to remodel the building. Furniture and fixtures cost $53,000, and dishes and supplies—a current asset—were obtained for $8,700. All expenditures were for cash. Assume that all of these expenditures occurred on January 1, 2018. depreciation information: Monster is depreciating the building over 25 years using the straight-line method, with estimated residual value of $59,000. The furniture and fixtures will be replaced at the end of five years and are being depreciated using thedouble-declining-balance method, with a residual value of zero. At the end of the first year, the company still had dishes and supplies worth $1,500. Show what the company will report for supplies, plant assets, and cash flows at the end of the first year on its income statement, balance sheet, and statement of cash flows. Begin with…
Onslow Company purchased a used machine for $192,000 cash on January 2. On January 3, Onslow paid $10,000 to wire electricity to the machine. Onslow paid an additional $2,000 on January 4 to secure the machine for operation. The machine will be used for six years and have a $23,040 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. 3. Prepare journal entries to record the machine’s disposal under each separate situation: (a) it is sold for $23,500 cash and (b) it is sold for $94,000 cash.
Onslow Company purchased a used machine for $192,000 cash on January 2. On January 3, Onslow paid $6,000 to wire electricity to the machine. Onslow paid an additional $1,200 on January 4 to secure the machine for operation. The machine will be used for six years and have a $23,040 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. Problem 10-6A (Algo) Part 3 3. Prepare journal entries to record the machine's disposal under each separate situation: (a) it is sold for $20,000 cash and (b) it is sold for $80,000 cash. View transaction list Journal entry worksheet < 1 2 Record the sale of the used machine for $20,000 cash. Note: Enter debits before credits. Date December 31 General Journal Debit Credit
On 4 January 20X5, a new legislation was enacted requiring the company to remediate damages to the land due to the use of harsh chemicals in their manufacturing plant. The total estimated cost is $850,000. The company plans to perform the work in nine years. The interest rate specific to the liability is 7%. Prepare the journal entries on 4 January 20X5 and 31 December 20X5.
Larkspur Landscaping began construction of a new plant on December 1, 2022 (all amounts in thousands). On this date, the company purchased a parcel of land for ¥180,700 in cash. In addition, it paid ¥2,600 in surveying costs and ¥5,200 for a title insurance policy. An old dwelling on the premises was demolished at a cost of ¥3,900, with ¥1,300 being received from the sale of materials. Architectural plans were also formalized on December 1, 2022, when the architect was paid ¥39,000. The necessary building permits costing ¥3,900 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2023 as follows. Date of Payment March 1 May 1 July 1 The building was completed on July 1, 2023. To finance construction of this plant, Larkspur borrowed ¥780,000 from the bank on December 1, 2022. Larkspur had no other borrowings. The ¥780,000 was a 10-year loan bearing interest at 8%. Excess funds…
Cala Manufacturing purchases land for $459,000 as part of its plans to build a new plant. The company pays $39,800 to tear down an old building on the lot and $58,835 to fill and level the lot. It also pays construction costs of $1,498,000 for the new building and $94,558 for lighting and paving a parking area. Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash. View transaction list Journal entry worksheet A Record the total costs of the plant assets. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View genera
Murphy Self Storage purchased land, paying $160,000 cash as a down payment and signing a $185,000 note payable for the balance. Murphy also had to pay delinquent property tax of $2,000, title insurance costing $6,000, and $11,000 to level the land and remove an unwanted building. The company paid $58,000 to add soil for the foundation and then constructed an office building at a cost of $700,000. It also paid $52,000 for a fence around the property, $11,000 for the company sign near the property entrance, and $3,000 for lighting of the grounds. Read the requirement. The cost of the land is The cost of the land improvements is The cost of the building is Requirement 1. What is the capitalized cost of each of Murphy's land, land improvements, and building? Print Done - X