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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) 55,000 c. Delinquent real estate taxes on property, assumed by purchaser 15,000 d. Cost of razing and removing building acquired in (b) 4,000 e. Proceeds from sale of salvage materials from old building 3,000 * 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 12,000 j. Money borrowed to pay building contractor 800,000 * k. Cost of repairing windstorm damage during construction 5,000 I. Cost of paving parking lot to be used by customers 33,000 m. Cost of trees and shrubbery planted 10,000 n. Cost of floodlights installed on parking lot 2,000 o. Cost of repairing vandalism damage during construction 3,000 p. Proceeds from insurance company for windstorm and vandalism damage 7,000 * q. Payment to building contractor for new building 900,000 r. Interest incurred on building loan during construction s. Refund of premium on insurance policy (h) canceled after 11 months 35,000 500 *

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) 55,000 c. Delinquent real estate taxes on property, assumed by purchaser 15,000 d. Cost of razing and removing building acquired in (b) 4,000 e. Proceeds from sale of salvage materials from old building 3,000 * 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 12,000 j. Money borrowed to pay building contractor 800,000 * k. Cost of repairing windstorm damage during construction 5,000 I. Cost of paving parking lot to be used by customers 33,000 m. Cost of trees and shrubbery planted 10,000 n. Cost of floodlights installed on parking lot 2,000 o. Cost of repairing vandalism damage during construction 3,000 p. Proceeds from insurance company for windstorm and vandalism damage 7,000 * q. Payment to building contractor for new building 900,000 r. Interest incurred on building loan during construction s. Refund of premium on insurance policy (h) canceled after 11 months 35,000 500 *

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter7: Fixed Assets, Natural Resources, And Intangible Assets
Section: Chapter Questions
Problem 7.1.3P
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Required: 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from the dropdown list for each letter and enter the appropriate amount. Enter receipts as negative amounts using the minus sign. Item Account Amount а. b. c. d. $4 $1 е. f. $ g. $ h. $4 i. j. $4 k. %$4 1. $4 $4 m. n. o. $4 р. %24 q. r. %$4 S. 2. Determine the amount debited to Land, Land Improvements, and Building. Land Land Improvements Building $ 3. Land used as a plant site lose its ability to provide services; thus, it depreciated. However, land improvements lose their ability to provide services as time passes and are, therefore, 4. What would be the effect on the income statement and balance sheet if the cost of filling and grading land of $12,000 [payment (i)] was incorrectly classified as Land Improvements rather than Land? Assume Land Improvements are depreciated over a 20-year life using the doubledeclining- balance method.
Transcribed Image Text:Required: 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from the dropdown list for each letter and enter the appropriate amount. Enter receipts as negative amounts using the minus sign. Item Account Amount а. b. c. d. $4 $1 е. f. $ g. $ h. $4 i. j. $4 k. %$4 1. $4 $4 m. n. o. $4 р. %24 q. r. %$4 S. 2. Determine the amount debited to Land, Land Improvements, and Building. Land Land Improvements Building $ 3. Land used as a plant site lose its ability to provide services; thus, it depreciated. However, land improvements lose their ability to provide services as time passes and are, therefore, 4. What would be the effect on the income statement and balance sheet if the cost of filling and grading land of $12,000 [payment (i)] was incorrectly classified as Land Improvements rather than Land? Assume Land Improvements are depreciated over a 20-year life using the doubledeclining- balance method.
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) 55,000 c. Delinquent real estate taxes on property, assumed by purchaser 15,000 d. Cost of razing and removing building acquired in (b) 4,000 e. Proceeds from sale of salvage materials from old building 3,000 * 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 12,000 j. Money borrowed to pay building contractor 800,000 * k. Cost of repairing windstorm damage during construction 5,000 I. Cost of paving parking lot to be used by customers 33,000 m. Cost of trees and shrubbery planted 10,000 n. Cost of floodlights installed on parking lot 2,000 o. Cost of repairing vandalism damage during construction 3,000 p. Proceeds from insurance company for windstorm and vandalism damage 7,000 * q. Payment to building contractor for new building 900,000 r. Interest incurred on building loan during construction 35,000 s. Refund of premium on insurance policy (h) canceled after 11 months 500 *
Transcribed Image Text: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) 55,000 c. Delinquent real estate taxes on property, assumed by purchaser 15,000 d. Cost of razing and removing building acquired in (b) 4,000 e. Proceeds from sale of salvage materials from old building 3,000 * 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 12,000 j. Money borrowed to pay building contractor 800,000 * k. Cost of repairing windstorm damage during construction 5,000 I. Cost of paving parking lot to be used by customers 33,000 m. Cost of trees and shrubbery planted 10,000 n. Cost of floodlights installed on parking lot 2,000 o. Cost of repairing vandalism damage during construction 3,000 p. Proceeds from insurance company for windstorm and vandalism damage 7,000 * q. Payment to building contractor for new building 900,000 r. Interest incurred on building loan during construction 35,000 s. Refund of premium on insurance policy (h) canceled after 11 months 500 *
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