Chapter 9, Problem 9.1APR

1.

To determine

Cost of Land: The cost of land includes the following costs:

• Purchase price of land
• Attorney fees
• Real estate agent commission
• Title
• Recording fees
• Additional expenses :
  • Clearing
  • Filling and leveling of land
  • Removing of old buildings

To identify: each item by letter and the list the amounts in columnar form.

2.

To determine

the amount debited to Land, Land Improvements, and Building.

3.

To determine

To explain: the contradictory application of the concept of depreciation for Land and Land Improvements.

4.

To determine

To explain: the effect on the current year’s income statement and balance sheet due to wrong classification of the cost of filling and grading land.