On January 6, Year 1, Mount Jackson Corporation purchased a tract of land for a factory site for $805,000. An existing building on the site was demolished and the new factory was completed on October 11, Year 1. Additional cost data are shown below: Construction cost of new building Real estate and attorney fees Architect fees Cost to demolish old building Salvage recovery from old building Which of the following are the capitalized costs of the land and the new building, respectively? $968,000 15,400 80,000 74,300 (11,000)

On January 6, Year 1, Mount Jackson Corporation purchased a tract of land for a factory site for $805,000. An existing building on the site was demolished and the new factory was completed on October 11, Year 1. Additional cost data are shown below: Construction cost of new building Real estate and attorney fees Architect fees Cost to demolish old building Salvage recovery from old building Which of the following are the capitalized costs of the land and the new building, respectively? $968,000 15,400 80,000 74,300 (11,000)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 3PA: During the current year, Alanna Co. had the following transactions pertaining to its new office...

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During the current year, Alanna Co. had the following transactions pertaining to its new office building. A. What should Alanna Co. record on its books for the land? The total cost of land includes all costs of preparing the land for use. The demolition cost of the old building is added to the land costs, and the sale of the old building scrap is subtracted from the land cost. B. What should Alanna Co. record on its books for the building?
Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is worth 100,000 and the building is worth 300,000. What cost should Utica assign to the land and to the building, respectively?
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Tree Lovers Inc. purchased 2,500 acres of woodland in which it intends to harvest the complete forest, leaving the land barren and worthless. Tree Lovers paid $5,000,000 for the land. Tree Lovers will sell the lumber as it is harvested and it expects to deplete it over ten years (150 acres in year one, 300 acres in year two, 250 acres in year three, 150 acres in year four, and 100 acres in year five). Calculate the depletion expense for the next five years and create the journal entry for year one.
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