On March 31, 2023, Capital Investment Advisers paid $4,500,000 for land with two buildings on it. The plan was to demolish Building 1 and build a new store (Building 3) in its place. Building 2 was to be used as a company office and was appraised at a value of $1,119,840. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $653,240. Without considering the buildings or improvements, the tract of land was estimated to have a value of $2,892,920. Capital incurred the following additional costs: Cost to demolish Building 1 Cost of additional landscaping Cost to construct new building (Building 3) Cost of new land improvements near Building 2 (Land Improvements 2) Required: 1. Allocate the costs incurred by Capital to the appropriate columns and total each column. $ 682,160 268,520 3,232,400 253,200
On March 31, 2023, Capital Investment Advisers paid $4,500,000 for land with two buildings on it. The plan was to demolish Building 1 and build a new store (Building 3) in its place. Building 2 was to be used as a company office and was appraised at a value of $1,119,840. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $653,240. Without considering the buildings or improvements, the tract of land was estimated to have a value of $2,892,920. Capital incurred the following additional costs: Cost to demolish Building 1 Cost of additional landscaping Cost to construct new building (Building 3) Cost of new land improvements near Building 2 (Land Improvements 2) Required: 1. Allocate the costs incurred by Capital to the appropriate columns and total each column. $ 682,160 268,520 3,232,400 253,200
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 3RE: Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is...
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![On March 31, 2023, Capital Investment Advisers paid $4,500,000 for land with two buildings on it. The plan was to demolish Building 1
and build a new store (Building 3) in its place. Building 2 was to be used as a company office and was appraised at a value of
$1,119,840. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $653,240. Without considering the
buildings or improvements, the tract of land was estimated to have a value of $2,892,920. Capital incurred the following additional
costs:
Cost to demolish Building 1
Cost of additional landscaping
Cost to construct new building (Building 3)
Cost of new land improvements near Building 2 (Land Improvements 2)
Required:
1. Allocate the costs incurred by Capital to the appropriate columns and total each column.
Purchase price
Demolition
Landscaping
New building
New improvements
Totals
$
Land
0 $
Building 2
0 $
Building 3
Land
Land
Improvements 1 Improvements 2
0 $
$ 682,160
268,520
3,232,400
253,200
0 $
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdcac5de9-ec12-40aa-ba8b-22195700b9e3%2Fd03eed82-0984-4751-b95d-e446a11b3d69%2Fj5ryu7_processed.png&w=3840&q=75)
Transcribed Image Text:On March 31, 2023, Capital Investment Advisers paid $4,500,000 for land with two buildings on it. The plan was to demolish Building 1
and build a new store (Building 3) in its place. Building 2 was to be used as a company office and was appraised at a value of
$1,119,840. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $653,240. Without considering the
buildings or improvements, the tract of land was estimated to have a value of $2,892,920. Capital incurred the following additional
costs:
Cost to demolish Building 1
Cost of additional landscaping
Cost to construct new building (Building 3)
Cost of new land improvements near Building 2 (Land Improvements 2)
Required:
1. Allocate the costs incurred by Capital to the appropriate columns and total each column.
Purchase price
Demolition
Landscaping
New building
New improvements
Totals
$
Land
0 $
Building 2
0 $
Building 3
Land
Land
Improvements 1 Improvements 2
0 $
$ 682,160
268,520
3,232,400
253,200
0 $
0
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