Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Question
Chapter 11, Problem 11.1MC
To determine
To identify: The correct option.
Given information:
Purchase price of land is $750,000.
Legal fees are $32,000.
Title guarantee insurance is $15,000.
Cost to clear timber is $18,000.
Proceed from sale of timber is $7,000.
Excavation cost is $20,000.
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China Express purchased land for $140,000. Prior to construction on the new building, the land had to be cleared of trees and brush. Construction costs incurred during the first year are listed below:
Land clearing costs
$ 5,000
Architect fees (for new building)
30,000
Legal fees for title investigation of land
1,000
Property taxes on land (for the first year)
2,500
Building construction costs
440,000
Required:Determine the amounts that should be recorded in the land and the new building accounts.
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Chapter 11 Solutions
Intermediate Accounting
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