#30 Plant Assets, Natural Res-Requirements1. Set up columns for Land, Land Improvements, Building, and Furniture. Show how toaccount for each cost by listing the cost under the correct account. Determine the totalcost of each asset.2. All construction was complete and the assets were placed in service on October 1.Record partial-year depreciation expense for the year ended December 31. Round tothe nearest dollar. > Problems Group ADiscount Parking, near an airport, incurred the following costs to acquire land, makeland improvements, and construct and furnish a small building:P9-30A Determining asset cost and recording partial-year depreciation,Learning Objectives 1, 2straight-line1. Bldg. $461,100$ 80,000a. Purchase price of three acres of landb. Delinquent real estate taxes on the land to be paid by Discount Parkingc. Additional dirt and earthmoving6,3009,0003,200d. Title insurance on the land acquisitione. Fence around the boundary of the property9,6001,000f. Building permit for the buildingg. Architect's fee for the design of the buildingh. Signs near the front of the property20,7009,300i. Materials used to construct the building215,000j. Labor to construct the building175,000k. Interest cost on construction loan for the building1. Parking lots on the property9,400m. Lights for the parking lotsn. Salary of construction supervisor (80% to building; 20% to parking lot28,50011,200and concrete walks)o. Furniture50,000p. Transportation of furniture from seller to the buildingq. Additional fencing11,2002,200Discount Parking depreciates land improvements over 15 years, buildings over 406,600vears, and furniture over 10 years, all on a straight-line basis with zero residual value

Fixed assets: These are the assets which were used in the business for more than one year. These…

> Problems Group A P9-30A Determining asset cost and recording partial-year depreciation, straight-line Discount Parking, near an land improvements, and construct and furnish a small building: Learning Objectives 1, 2 airport, incurred the following costs to acquire land, make 1. Bldg. $461,100 $ 80,000 6,300 b. Delinquent real estate taxes on the land to be paid by Discount Parking c. Additional dirt and earthmoving a. Purchase price of three acres of land 9,000 3,200 d. Title insurance on the land acquisition e. Fence around the boundary of the property 9,600 1,000 f. Building permit for the building g. Architect's fee for the design of the building h. Signs near the front of the property 20,700 9,300 i. Materials used to construct the building 215,000 j. Labor to construct the building 175,000 k. Interest cost on construction loan for the building I. Parking lots on the property 9,400 m. Lights for the parking lots n. Salary of construction supervisor (80% to building; 20% to parking lot and concrete walks) o. Furniture 28,500 11,200 50,000 p. Transportation of furniture from seller to the building q. Additional fencing 11,200 6,600 Discount Parking depreciates land improvements over 15 years, buildings over 40 years, and furniture over 10 years, all on a straight-line basis with zero residual value 2,200

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter17: Property Transactions: §1231 And Recapture Provisions

Section: Chapter Questions

Problem 40P