Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 11, Problem 3PB
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?
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During the current year, Alanna Co. had the following transactions pertaining to its new office building.
Purchase price of land
$120,000
Legal fees for contracts to purchase land
3,000
Architech fees
17,000
Demolition of the old building on site
9,000
Sale of scrap from old building
6,000
Construction cost of new building
700,000
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.
$fill in the blank 1
B. What should Alanna Co. record on its books for the building?
$fill in the blank 2
I compute the math as directed. First I take the initial cost of the land and add it to the short-term note. Then, I add the legal fees, delinquent taxes, and demolition costs of the building. I then deduct the amount received from selling the salvage materials. I don't include the cost paid to the contractor. That cost is assigned to the new warehouse. The answers I keep coming up with says incorrect.
Smatter Corporation purchased land for a new building. Which of the following costswould not be included in the cost of the land?a. Purchase price of the landb. Cost of demolishing an old garage located on the landc. Cost of a new parking lot constructed on the landd. Brokerage commission paid to the real estate agent who handled the land transaction
Chapter 11 Solutions
Principles of Accounting Volume 1
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