Wildhorse 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 ¥152,900 in cash. In addition, it paid ¥2,200 in surveying costs and ¥4,400 for a title insurance policy. An old dwelling on the premises was demolished at a cost of ¥3,300, with ¥1,100 being received from the sale of materials. Architectural plans were also formalized on December 1, 2022, when the architect was paid ¥33,000. The necessary building permits costing ¥3,300 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, Wildhorse borrowed ¥660,000 from the bank on December 1, 2022. Wildhorse had no other borrowings. The ¥660,000 was a 10-year loan bearing interest at 8%. Excess funds from the loan were invested during 2022 and earned ¥2,200. During 2023, the excess funds from the loan earned ¥1,100. Compute the balance in each of the following accounts at December 31, 2022, and December 31, 2023. (Round answers to O decimal places, e.g. 5,275.) a. b. C. Amount of Payment ¥264,000 363,000 66,000 Land Buildings Interest Expense December 31, 2022 159500 38500 4400 December 31, 2023 159500 731500 52800
Wildhorse 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 ¥152,900 in cash. In addition, it paid ¥2,200 in surveying costs and ¥4,400 for a title insurance policy. An old dwelling on the premises was demolished at a cost of ¥3,300, with ¥1,100 being received from the sale of materials. Architectural plans were also formalized on December 1, 2022, when the architect was paid ¥33,000. The necessary building permits costing ¥3,300 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, Wildhorse borrowed ¥660,000 from the bank on December 1, 2022. Wildhorse had no other borrowings. The ¥660,000 was a 10-year loan bearing interest at 8%. Excess funds from the loan were invested during 2022 and earned ¥2,200. During 2023, the excess funds from the loan earned ¥1,100. Compute the balance in each of the following accounts at December 31, 2022, and December 31, 2023. (Round answers to O decimal places, e.g. 5,275.) a. b. C. Amount of Payment ¥264,000 363,000 66,000 Land Buildings Interest Expense December 31, 2022 159500 38500 4400 December 31, 2023 159500 731500 52800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Wildhorse 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 ¥152,900 in cash. In addition, it paid ¥2,200 in surveying costs and ¥4,400 for a title insurance policy. An
old dwelling on the premises was demolished at a cost of ¥3,300, with ¥1,100 being received from the sale of materials.
Architectural plans were also formalized on December 1, 2022, when the architect was paid ¥33,000. The necessary building permits
costing ¥3,300 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
a.
b.
The building was completed on July 1, 2023.
To finance construction of this plant, Wildhorse borrowed ¥660,000 from the bank on December 1, 2022. Wildhorse had no other
borrowings. The ¥660,000 was a 10-year loan bearing interest at 8%. Excess funds from the loan were invested during 2022 and
earned ¥2,200. During 2023, the excess funds from the loan earned ¥1,100.
C.
Amount of Payment
Compute the balance in each of the following accounts at December 31, 2022, and December 31, 2023. (Round answers to O decimal
places, e.g. 5,275.)
Land
Buildings
Interest Expense
¥
¥264,000
¥
363,000
¥
66,000
December 31, 2022
159500
38500
4400
¥
¥
¥
December 31, 2023
159500
731500
52800
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Step 1: Introduction of borrowing cost
VIEWStep 2: Calculation of the land account balance on December 31, 2022 and 2023
VIEWStep 3: calculation of the Balance in the Building on Dec 31, 2022 and 2023 is as follows-
VIEWStep 4: calculation of interest expenses for the years 2022 and 2023
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