The following account balances were included in Bromley Company’s balance sheet on December 31, 2018:Land$100,000Land improvements20,000Buildings300,000Machinery and Equipment500,000 During 2019, the following transactions occurred:Jan. 1Land was acquired for $70,000 for a future building site. Commissions of $4,000 were paid to a real estate agent.Feb. 1A factory and land were acquired from Kent Development Company by issuing 20,000 shares of $3 par common stock. At that time, the stock was selling for $10 per share on the New York Stock Exchange. The independently appraised values of the land and the factory were $60,000 and $180,000, respectively.Mar. 1Equipment was acquired at a cost of $120,000. In addition, sales tax, freight costs, and installation costs were $7,000, $10,000, and $16,000, respectively. During installation, the equipment was damaged, and $2,000 was spent for repairs.Apr. 1A new parking lot was installed at a cost of $30,000.Aug. 1Half the land purchased in Item 1 was prepared as a building site. Costs of $26,000 were incurred to clear the land, and the timber recovered was sold for $3,000. A new building was built for $60,000. Architect’s fees relating to construction were $18,000, and imputed interest on equity funds used during construction was $15,000. No debt is outstanding.Sept. 1Costs of $20,000 were incurred to improve some leased office space. The lease will terminate in 2021 and is not expected to be renewed.Oct. 1A group of new machines was purchased under a royalty agreement that provides for payment of annual royalties based on units produced. The invoice price of the machines was $30,000, freight costs were $2,000.Dec. 31Royalty payments on the new machines for 2019 totalled $12,000. Required: Prepare journal entries to record all the preceding events. Unless otherwise indicated, assume the company makes all payments in cash.

The financial transactions are initially recorded in the form of a journal entry by the company. The…

Answered: The following account balances were…

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

Chapter21: The Statement Of Cash Flows

Section: Chapter Questions

Problem 17E: Investing Activities and Depreciable Assets Verlando Company had the following account balances and...

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The following account balances were included in Bromley Company’s balance sheet on December 31, 2018:

Land	$100,000
Land improvements	20,000
Buildings	300,000
Machinery and Equipment	500,000

During 2019, the following transactions occurred:

Jan. 1	Land was acquired for $70,000 for a future building site. Commissions of $4,000 were paid to a real estate agent.
Feb. 1	A factory and land were acquired from Kent Development Company by issuing 20,000 shares of $3 par common stock. At that time, the stock was selling for $10 per share on the New York Stock Exchange. The independently appraised values of the land and the factory were $60,000 and $180,000, respectively.
Mar. 1	Equipment was acquired at a cost of $120,000. In addition, sales tax, freight costs, and installation costs were $7,000, $10,000, and $16,000, respectively. During installation, the equipment was damaged, and $2,000 was spent for repairs.
Apr. 1	A new parking lot was installed at a cost of $30,000.
Aug. 1	Half the land purchased in Item 1 was prepared as a building site. Costs of $26,000 were incurred to clear the land, and the timber recovered was sold for $3,000. A new building was built for $60,000. Architect’s fees relating to construction were $18,000, and imputed interest on equity funds used during construction was $15,000. No debt is outstanding.
Sept. 1	Costs of $20,000 were incurred to improve some leased office space. The lease will terminate in 2021 and is not expected to be renewed.
Oct. 1	A group of new machines was purchased under a royalty agreement that provides for payment of annual royalties based on units produced. The invoice price of the machines was $30,000, freight costs were $2,000.
Dec. 31	Royalty payments on the new machines for 2019 totalled $12,000.

	Required:
	Prepare journal entries to record all the preceding events. Unless otherwise indicated, assume the company makes all payments in cash.

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The following account balances were included in Bromley Company’s balance sheet on December 31, 2018: Land $100,000 Land improvements 20,000 Buildings 300,000 Machinery and Equipment 500,000