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Business Accounting Principles of Accounting

The tangible assets of a business include the assets that a person can see and touch. The tangible assets have physical existence. Example of tangible assets includes building, land, and machines. Todetermine: Theamount that should be debited to land and land improvements account. Amount that should be debited to land account = $338,400 Amount that should be debited to land improvements account = $78,400 The land account and land improvement account will be debited with the cost of land and land improvement, respectively. The cost of land is calculated as follows: Particular Amount ($) Purchase price 300,000 Broker’s fee 24,000 Title search and other fees 2,200 Demolition of a cottage on the property 8,000 General grading of the property 4,200 The total cost of land 338,400 The cost of land improvements is calculated as follows: Particular Amount ($) Paving parking lots 40,000 Lighting for parking lots 32,000 Signs for parking lots 6,400 The total cost of land improvements 78,400

The tangible assets of a business include the assets that a person can see and touch. The tangible assets have physical existence. Example of tangible assets includes building, land, and machines. Todetermine: Theamount that should be debited to land and land improvements account. Amount that should be debited to land account = $338,400 Amount that should be debited to land improvements account = $78,400 The land account and land improvement account will be debited with the cost of land and land improvement, respectively. The cost of land is calculated as follows: Particular Amount ($) Purchase price 300,000 Broker’s fee 24,000 Title search and other fees 2,200 Demolition of a cottage on the property 8,000 General grading of the property 4,200 The total cost of land 338,400 The cost of land improvements is calculated as follows: Particular Amount ($) Paving parking lots 40,000 Lighting for parking lots 32,000 Signs for parking lots 6,400 The total cost of land improvements 78,400

Solution Summary: The author explains that tangible assets include building, land, and machines. The cost of land is calculated as follows: Particular Amount ()Purchase price 300,000

Principles of Accounting

Principles of Accounting

12th Edition

ISBN: 9781133626985

Author: Belverd E. Needles, Marian Powers, Susan V. Crosson

Publisher: Cengage Learning

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Principles of Accounting

Ch. 10 - Prob. 2EA Ch. 10 - On January 13, 2013, Precision Oil Company...Ch. 10 - Prob. 2C

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