Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Question
Chapter 9, Problem 1PB
1.
To determine
Identify each item by letter and the list the amounts in columnar form.
2.
To determine
Calculate the amount debited to Land, Land Improvements, and Building.
3.
To determine
Elaborate the contradictory application of the concept of
4.
To determine
Determine and explain the effect on the current year’s income statement and balance sheet due to wrong classification of the cost of filling and grading land.
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Allocating payments and receipts to fixed asset accounts
The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk.
a.
Fee paid to attorney for title search
$2,000
b.
Cost of real estate acquired as a plant site: Land
280,000
Building (to be demolished)
55,000
c.
Delinquent real estate taxes on property, assumed by purchaser
15,000
d.
Cost of razing and removing building acquired in (b)
5,000
e.
Proceeds from sale of salvage materials from old building
3,000
*
f.
Special assessment paid to city for extension of water main to the property
29,000
g.
Architect’s and engineer’s fees for plans and supervision
60,000
h.
Premium on one-year insurance policy during construction
7,000
i.
Cost of filling and grading land
13,000
j.
Money borrowed to pay building…
Allocating payments and receipts to fixed asset accounts
The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk.
a.
Fee paid to attorney for title search
$3,000
b.
Cost of real estate acquired as a plant site: Land
290,000
Building (to be demolished)
60,000
c.
Delinquent real estate taxes on property, assumed by purchaser
16,000
d.
Cost of razing and removing building acquired in (b)
4,000
e.
Proceeds from sale of salvage materials from old building
4,000
*
f.
Special assessment paid to city for extension of water main to the property
28,000
g.
Architect’s and engineer’s fees for plans and supervision
70,000
h.
Premium on one-year insurance policy during construction
5,000
i.
Cost of filling and grading land
13,000
j.
Money borrowed to pay building…
Allocating payments and receipts to fixed asset accounts
The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk.
a.
Fee paid to attorney for title search
$3,000
b.
Cost of real estate acquired as a plant site: Land
280,000
Building (to be demolished)
55,000
c.
Delinquent real estate taxes on property, assumed by purchaser
16,000
d.
Cost of razing and removing building acquired in (b)
5,000
e.
Proceeds from sale of salvage materials from old building
5,000
*
f.
Special assessment paid to city for extension of water main to the property
28,000
g.
Architect’s and engineer’s fees for plans and supervision
70,000
h.
Premium on one-year insurance policy during construction
7,000
i.
Cost of filling and grading land
11,000
j.
Money borrowed to pay building…
Chapter 9 Solutions
Financial And Managerial Accounting
Ch. 9 - ONeil Office Supplies has a fleet of automobiles...Ch. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Prob. 4DQCh. 9 - Prob. 5DQCh. 9 - Keyser Company purchased a machine that has a...Ch. 9 - Prob. 7DQCh. 9 - A. Under what conditions is the use of an...Ch. 9 - Prob. 9DQCh. 9 - Prob. 10DQ
Ch. 9 - Straight-line depreciation A building acquired at...Ch. 9 - Units-of-activity depreciation A truck acquired at...Ch. 9 - Double-declining-balance depreciation A building...Ch. 9 - Revision of depreciation Equipment with a cost of...Ch. 9 - Capital and revenue expenditures On February 14,...Ch. 9 - Sale of equipment Equipment was acquired at the...Ch. 9 - Prob. 7BECh. 9 - Prob. 8BECh. 9 - Fixed asset turnover ratio Select financial...Ch. 9 - Costs of acquiring fixed assets Melinda Stoffers...Ch. 9 - Prob. 2ECh. 9 - Prob. 3ECh. 9 - Nature of depreciation Tri-City Ironworks Co....Ch. 9 - Straight-line depreciation rates Convert each of...Ch. 9 - Straight-line depreciation A refrigerator used by...Ch. 9 - Depreciation by units-of-activity method A...Ch. 9 - Depreciation by units-of-activity method Prior to...Ch. 9 - Depreciation by two methods A Kubota tractor...Ch. 9 - Depreciation by two methods A storage tank...Ch. 9 - Partial-year depreciation Equipment acquired at a...Ch. 9 - Revision of depreciation A building with a cost of...Ch. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Capital expenditure and depreciation Willow Creek...Ch. 9 - Entries for sale of fixed asset Equipment acquired...Ch. 9 - Disposal of fixed asset Equipment acquired on...Ch. 9 - Prob. 19ECh. 9 - Kleen Company acquired patent rights on January 10...Ch. 9 - Prob. 21ECh. 9 - Prob. 22ECh. 9 - Asset traded for similar asset A printing press...Ch. 9 - Prob. 24ECh. 9 - Prob. 25ECh. 9 - Prob. 26ECh. 9 - Prob. 1PACh. 9 - Comparing three depreciation methods Dexter...Ch. 9 - Depreciation by three methods; partial years...Ch. 9 - Depreciation by two methods; sale of fixed asset...Ch. 9 - Transactions for fixed assets, including sale The...Ch. 9 - Prob. 6PACh. 9 - Prob. 1PBCh. 9 - Comparing three depreciation methods Waylander...Ch. 9 - Depreciation by three methods; partial years...Ch. 9 - Depreciation by two methods; sale of fixed asset...Ch. 9 - Transactions for fixed assets, including sale The...Ch. 9 - Prob. 6PBCh. 9 - Compare Amazon.com to Netflix Amazon.com, Inc....Ch. 9 - Prob. 2MADCh. 9 - Prob. 3MADCh. 9 - Compare Fed Ex and UPS FedEx Corporation (FDX) and...Ch. 9 - Prob. 5MADCh. 9 - Revising depreciation estimates Hard Bodies Co. is...Ch. 9 - Communication Godwin Co. owns three delivery...Ch. 9 - Prob. 4TIF
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- Allocate payments and receipts to fixed asset accounts The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale apparel business. The receipts are identified by an asterisk. Instructions Determine the increases to Land, Lind Improvements. and Building.arrow_forwardThe following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk. Instructions 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Indicate receipts by an asterisk. Identify each item by letter and list the amounts in columnar form, as follows: 2. Determine the amount debited to Land, Land Improvements, and Building. 3. The costs assigned to the land, which is used as a plant site, will not be depreciated, while the costs assigned to land improvements will be depreciated. Explain this seemingly contradictory application of the concept of depreciation. 4. What would be the effect on the current years income statement and balance sheet if the cost of filling and grading land of 12,000 [payment (i)] was incorrectly classified as Land Improvements rather than Land? Assume that Land Improvements are depreciated over a 20-year life using the double-declining-balance method.arrow_forwardAllocating payments and receipts to fixed asset accounts The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale apparel business. The receipts are identified by an asterisk. A. Fee paid to attorney for title search............................................ 3,600 B. Cost of real estate acquired as a plant site: Land................................ 720,000 Building (to be demolished)........... 60,000 C. Finder's fee paid to real estate agency.......................................... 23,400 D. Delinquent real estate taxes on property, assumed by purchaser................. 15,000 E. Architect's and engineer's fees for plans for new building....................... 75,000 F. Cost of removing building purchased with land in (B)............................ 10,000 G. Proceeds from sale of salvage materials from old building....................... 3,400 H. Cost of filling and grading land................................................ 18,000 1. Premium on one-year insurance policy during construction...................... 8,400 J. Money borrowed to pay building contractor.................................... 800,000 K. Special assessment paid to city for extension of water main to the property....... 13,400 L. Cost of repairing windstorm damage during construction....................... 3,000 M. Cost of repairing vandalism damage during construction........................ 2,000 N. Cost of trees and shrubbery planted........................................... 14,000 0. Cost of paving parking lot to be used by customers............................. 21,600 P. Interest incurred on building loan during construction.......................... 40,000 Q. Proceeds from insurance company for windstorm and vandalism damage........ 4,500 R. Payment to building contractor for new building................................ 800,000 S. Refund of premium on insurance policy (1) canceled after 10 months............. 1,400 Instructions 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Indicate receipts by an asterisk. Identify each item by letter and list the amounts in columnar form, as follows: Item Land Land Improvements Building Other Accounts 2. Determine the amount debited to Land. Land Improvements, and Building. 3. The costs assigned to the land, which is used as a plant site, will not be depreciated, while the costs assigned to land improvements will be depreciated. Explain this seemingly contradictory application of the concept of depreciation. 4. What would be the effect on the income statement and balance sheet if the cost of paving the parking lot of 21,600 [payment (0)] was incorrectly classified as Land rather than Land Improvements? Assume Land Improvements are depreciated over a 10-year life using the double-declining-balance method.arrow_forward
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