Bundle: Accounting, Chapters 1-13, 26th + Working Papers, Chapters 1-17 For Warren/reeve/duchac's Accounting, 26th And Financial Accounting, 14th + ... For Warren/reeve/duchac's Accounting, 26th
26th Edition
ISBN: 9781337498159
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 10, Problem 10.1BPR
Allocating payments and receipts to fixed asset accounts
The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale apparel business. The receipts are identified by an asterisk.
| a. Fee paid to attorney for title search | $ 3,600 |
| b. Cost of real estate acquired as a plant site: Land | 720,000 |
| Building (to be demolished) | 60,000 |
| c. Finder’s fee paid to real estate agency | 23,400 |
| d. Delinquent real estate taxes on property, assumed by purchaser | 15,000 |
| e. Architect’s and engineer’s fees for plans for new building | 75,000 |
| f. Cost of removing building purchased with land in (b) | 10,000 |
| g. Proceeds from sale of salvage materials from old building | 3,400* |
| h. Cost of filling and grading land | 18,000 |
| i. Premium on one-year insurance policy during construction. | 8,400 |
| j. Money borrowed to pay building contractor | 800,000* |
| k. Special assessment paid to city for extension of water main to the property | 13,400 |
| 1. Cost of repairing windstorm damage during construction | 3,000 |
| m. Cost of repairing vandalism damage during construction | 2,000 |
| n. Cost of trees and shrubbery planted | 14,000 |
| o. Cost of paving parking lot to be used by customers | 21,600 |
| p. Interest incurred on building loan during construction | 40,000 |
| q. Proceeds from insurance company for windstorm and vandalism damage | 4,500* |
| r. Payment to building contractor for new building | 800,000 |
| s. Refund of premium on insurance policy (i) canceled after 10 months | 1,400* |
Instructions
1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Indicate receipts by an asterisk. Identify each item by letter and list the amounts in columnar form, as follows:
| Item | Land | Land Improvements | Building | Other Accounts |
2. Determine the amount debited to Land, Land Improvements, and Building.
3. The costs assigned to the land, which is used as a plant site, will not be
4. What would be the effect on the current year’s income statement and
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Allocating payments and receipts to fixed asset accountsThe following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk.
A.
Fee paid to attorney for title search..............
$2,500
B.
Cost of real estate acquired as a plant site: Land
285,000
C.
Delonquent real estate taxes on property, assumed by purchaser......
15,500
D.
Cost of razing and removing building acquired in B.........
5,000
E.
Proceeds from sale of salvage materials from old building........
4,000*
F.
Special assessment paid to city for extension of water main to the property......
29,000
G.
Architect's and engineer's fees for plans and supervision........
60,000
H.
Premium on one-year insurance policy during construction.....
6,000
I.
Cost of filling and grading land.............
12,000
J.
Money borrowed to pay building contactor.......
900,000*
K.
Cost of…
Allocating payments and receipts to fixed asset accounts
The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk.
a.
Fee paid to attorney for title search
$3,000
b.
Cost of real estate acquired as a plant site: Land
290,000
Building (to be demolished)
60,000
c.
Delinquent real estate taxes on property, assumed by purchaser
16,000
d.
Cost of razing and removing building acquired in (b)
4,000
e.
Proceeds from sale of salvage materials from old building
4,000
*
f.
Special assessment paid to city for extension of water main to the property
28,000
g.
Architect’s and engineer’s fees for plans and supervision
70,000
h.
Premium on one-year insurance policy during construction
5,000
i.
Cost of filling and grading land
13,000
j.
Money borrowed to pay building…
Allocating payments and receipts to fixed asset accounts
The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk.
a.
Fee paid to attorney for title search
$3,000
b.
Cost of real estate acquired as a plant site: Land
280,000
Building (to be demolished)
55,000
c.
Delinquent real estate taxes on property, assumed by purchaser
16,000
d.
Cost of razing and removing building acquired in (b)
5,000
e.
Proceeds from sale of salvage materials from old building
5,000
*
f.
Special assessment paid to city for extension of water main to the property
28,000
g.
Architect’s and engineer’s fees for plans and supervision
70,000
h.
Premium on one-year insurance policy during construction
7,000
i.
Cost of filling and grading land
11,000
j.
Money borrowed to pay building…
Chapter 10 Solutions
Bundle: Accounting, Chapters 1-13, 26th + Working Papers, Chapters 1-17 For Warren/reeve/duchac's Accounting, 26th And Financial Accounting, 14th + ... For Warren/reeve/duchac's Accounting, 26th
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