Larkspur Landscaping began construction of a new plant on December 1, 2020. On this date, the company purchased a parcel of land for $150,000 in cash. In addition, it paid $2.400 in surveying costs and $3,840 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $1.200 being received from the sale of materials. Architectural plans were also formalized on December 1, 2020, when the architect was paid $36,000. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2021 as follows. Date of Payment Amount of Payment March 1 $262,800 May 1 333,600 July 1 63.600 The building was completed on July 1, 2021. To finance construction of this plant. Larkspur borrowed $603,600 from the bank on December 1, 2020. Larkspur had no other borrowings. The $603,600 was a 10-year loan bearing interest at 10%. Compute the balance in each of the following accounts at December 31, 2020, and December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.) (a) (b) (c) Balance in Land Account Balance in Building Balance in Interest Expense December 31, 2020 December 31, 2021
Larkspur Landscaping began construction of a new plant on December 1, 2020. On this date, the company purchased a parcel of land for $150,000 in cash. In addition, it paid $2.400 in surveying costs and $3,840 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $1.200 being received from the sale of materials. Architectural plans were also formalized on December 1, 2020, when the architect was paid $36,000. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2021 as follows. Date of Payment Amount of Payment March 1 $262,800 May 1 333,600 July 1 63.600 The building was completed on July 1, 2021. To finance construction of this plant. Larkspur borrowed $603,600 from the bank on December 1, 2020. Larkspur had no other borrowings. The $603,600 was a 10-year loan bearing interest at 10%. Compute the balance in each of the following accounts at December 31, 2020, and December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.) (a) (b) (c) Balance in Land Account Balance in Building Balance in Interest Expense December 31, 2020 December 31, 2021
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter17: Business Tax Credits And The Alternative Minimum Tax
Section: Chapter Questions
Problem 11P
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Transcribed Image Text:Larkspur Landscaping began construction of a new plant on December 1, 2020. On this date, the company purchased a parcel of land
for $150,000 in cash. In addition, it paid $2,400 in surveying costs and $3,840 for a title insurance policy. An old dwelling on the
premises was demolished at a cost of $3,360, with $1.200 being received from the sale of materials.
Architectural plans were also formalized on December 1, 2020, when the architect was paid $36,000. The necessary building permits
costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in
December with payments made to the contractor in 2021 as follows.
Date of Payment Amount of Payment
March 1
$262,800
333,600
63,600
May 1
July 1
The building was completed on July 1, 2021.
To finance construction of this plant. Larkspur borrowed $603.600 from the bank on December 1, 2020. Larkspur had no other
borrowings. The $603,600 was a 10-year loan bearing interest at 10%.
Compute the balance in each of the following accounts at December 31, 2020, and December 31, 2021. (Round answers to O decimal
places, e.g. 5,275.)
(a)
(b)
(c)
Balance in Land Account
Balance in Building
Balance in Interest Expense
December 31, 2020
December 31, 2021
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