Bundle: Financial & Managerial Accounting, 14th + Working Papers for Warren/Reeve/Duchac's Corporate Financial Accounting, 14th + Working Papers, ... & Managerial Accounting, 14th + CengageNOWv2,
14th Edition
ISBN: 9781337804011
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 9.2EX
(A)
To determine
Cost of Land: The cost of land includes the following costs:
- Purchase price of land
- Attorney fees
- Real estate agent commission
- Title
- Recording fees
- Additional expenses :
- Clearing
- Filling and leveling of land
- Removing of old buildings
To explain: whether the tree cutting, land clearing, and grading costs of constructing the ski slopes should be debited to the land account.
(B)
To determine
To explain: whether such costs debited to land account should be depreciated.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
When a company purchases land with a building on it and immediately tears down thebuilding so that the land can be used for the construction of a plant, the costs incurredto tear down the building should be:a. expensed as incurredb. added to the cost of the plantc. added to the cost of the landd. amortized over the estimated time period between the tearing down of thebuilding and the completion of the plan
Indicate whether each of the following expenditures should be classified as land, land improvements, buildings, equipment, or none of
these.
1.
2.
Parking lots
Electricity used by a machine
3.
Excavation costs
4.
Interest on building construction loan
5.
Cost of trial runs for machinery
6.
Drainage costs
7.
Cost to install a machine
8.
Fences
9.
Unpaid (past) property taxes assumed
10.
Cost of tearing down a building when land and a building on it are purchased
Which costs would most likely be capitalized in the “Land Improvements” account?
Costs associated with clearing the land for its intended business use
Costs associated with paving and fencing on the land
Costs associated with constructing a building on the land
Chapter 9 Solutions
Bundle: Financial & Managerial Accounting, 14th + Working Papers for Warren/Reeve/Duchac's Corporate Financial Accounting, 14th + Working Papers, ... & Managerial Accounting, 14th + CengageNOWv2,
Ch. 9 - ONeil Office Supplies has a fleet of automobiles...Ch. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Distinguish between the accounting for capital...Ch. 9 - Immediately after a used truck is acquired, a new...Ch. 9 - Keyser Company purchased a machine that has a...Ch. 9 - Is it necessary for a business to use the same...Ch. 9 - A. Under what conditions is the use of an...Ch. 9 - For some of the fixed assets of a business, the...Ch. 9 - A. Over what period of time should the cost of a...
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. 9.7BECh. 9 - Prob. 9.8BECh. 9 - Costs of acquiring fixed assets Melinda Staffers...Ch. 9 - Prob. 9.2EXCh. 9 - Prob. 9.3EXCh. 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. 9.13EXCh. 9 - Capital and revenue expenditures Jackie Fox owns...Ch. 9 - Capital and revenue expenditures Quality Move...Ch. 9 - Prob. 9.16EXCh. 9 - Entries for sale of fixed asset Equipment acquired...Ch. 9 - Prob. 9.18EXCh. 9 - Depletion entries Alaska Mining Co. acquired...Ch. 9 - Prob. 9.20EXCh. 9 - Prob. 9.21EXCh. 9 - Balance sheet presentation List the errors you...Ch. 9 - Asset traded for similar asset A printing press...Ch. 9 - Prob. 9.24EXCh. 9 - Prob. 9.25EXCh. 9 - Entries for trade of fixed asset On October 1,...Ch. 9 - Prob. 9.1APRCh. 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 - Prob. 9.5APRCh. 9 - Amortization and depletion entries Data related to...Ch. 9 - Allocating payments and receipts to fixed asset...Ch. 9 - Prob. 9.2BPRCh. 9 - Prob. 9.3BPRCh. 9 - Prob. 9.4BPRCh. 9 - Transactions for fixed assets, including sale The...Ch. 9 - Amortization and depletion entries Data related to...Ch. 9 - Continuing Company AnalysisAmazon: Fixed asset...Ch. 9 - Verizon: Fixed asset turnover ratio Verizon...Ch. 9 - FedEx and UPS: Fixed asset turnover ratio FedEx...Ch. 9 - Comcast, Google, and Walmart: Fixed asset turnover...Ch. 9 - Ethics in Action Hard Bodies Co. is a fitness...Ch. 9 - Communication Godwin Co. owns three delivery...
Knowledge Booster
Similar questions
- A company may acquire property, plant, and equipment and intangible assets for cash, in exchange for a deferred payment contract, by exchanging other assets, or by a combination of these methods. Required: 1. Identify six types of costs that should be capitalized as the cost of a parcel of land. For your answer, assume that the land has an existing building that is to be removed in the immediate future in order that a new building can be constructed on the site. 2. At what amount should a company record an asset acquired in exchange for a deferred payment contract? 3. In general, at what amount should assets received in exchange for other nonmonetary assets be valued? Specifically, at what amount should a company value a new machine acquired by exchanging an older, similar machine and paying cash?arrow_forward1. The cost of land typically includes the purchase price and all of the following costs except A) private driveways and parking lots. B) assumption of any liens or mortgages on the property. C) street lights, sewers, and drainage systems cost. D) grading, filling, draining, and clearing costs.arrow_forwardWhich of the following would be considered a capital expenditure? (A 22) O Making a payment on accounts payable O Paying accumulated income taxes O Paying shipping insurance on new equipment Retiring a bond payable taken out for construction Which of the following costs CANNOT be capitalized as part of land? Price paid to purchase the land. Clearing old buildings and other obstructions Obligations assumed when buying the land Overhead costs for construction projects on the landarrow_forward
- A company may acquire plant assets (among other ways) for cash, on a deffered payment plan, by exchanging other assets, or by a combination of these ways. Required: Identify six costs that should be capitalized as the cost of the land. For your answer, assume that land with an existing building is acquired for cash and that the existing building is to be removed in the immediate future so that a new building can be constructed on the site! At what amount should a company capitalize a plant asset acquired on a deffered payment plan? In general, at what amount should plant assets received in exchange for other nonmonetery assets to be recorded a new machine acquired by exchanging an older, similar machine and paying cash? Would your answe be the same if cash were received?arrow_forwardListed below are costs (or discounts) to purchase or construct new plant assets. (1) Indicate whether the costs should be expensed or capitalized (Meaning they are included in the cost of the plant assets on the balance sheet.) (2) For costs that should be capitalized, indicate in which category of plant assets (Equipment, Building, or Land) the related costs should be recorded on the balance sheet. List 1. Costs to clear and grade land purchased for a new plant. 2. Parking ticket fees incurred by the delivery truck that illegally parked when delivering new equipment. 3. Demolition costs to remove an old building on land purchased. 4. Janitorial costs incurred to clean equipment. 5. Repair costs to fix new equipment damaged by the crew that unpacked it. 6. Costs to lay foundation for a new building. 7. Costs to unpack and assemble new equipment. 8. Costs charged by a contractor to install new equipment into the production line. Categoryarrow_forwardMerchant Company purchased land for a building site. The costs associated with the property were: Purchase price Real estate commissions Legal fees Expenses of clearing the land What is the total recorded cost of the land? $ 184,000 15,900 1,700 2,900arrow_forward
- Merchant Company purchased property for a building site. The costs associated with the property were: What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?arrow_forwardGallon Auto purchased a neighboring lot for a new building and parking lot. Indicate whether each of the following expenditures is properly charged to (a) Land, (b) Land Improvements, or (c) Buildings:a. Paving costsb. Architects’ fee for building designc. Cost of clearing the propertyd. Cost of the propertye. Building construction costsf. Lights around the propertyg. Building permith. Interest on the construction loanarrow_forwardWhich of the following are includable to the cost of property and equipment? Transportation costs on machinery purchased under terms FOB shipping point Interest on loans borrowed to purchase an equipment Installation costs and cost of trial runs of a machinery Repairs on broken glass windows of a purchased buildings prior to occupancyarrow_forward
- Required: 1. At what amount should Edwards record the cost of the land and the new building, respectively? If an input box should be blank, enter a zero. Land Building Purchase price of land Demolition of old building Architect's fees Legal fees Construction costs Salvaged materials Total 2. Next Level If management misclassified a portion of the building's cost as part of the cost of the land, what would be the effect on the financial statements?arrow_forwardIf land is purchased as a building site, the cost of removing existing structures is not charged to the Land account.Select one:a. FALSEb. TRUEarrow_forwardShow the complete solution of the following: 1. What is the cost of the land?2. What is the cost of the land improvement?3. What is the cost of the building?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
