Allegro Supply plc, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and
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Instructions
Determine the amounts that should be debited to Land, to Buildings, and to Equipment. Assume the benefits of capitalizing interest during construction exceed the cost of implementation. Indicate how any costs not debited to these accounts should be recorded.
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Abstract company's fee for title search 520 Architect's fees 3,170 Cash paid for land and dilapidated building thereon 92,000 Removal of old building £20,000 Less: Residual value 5,500 14,500 Interest on short-term loans during construction 7,400 Excavation before construction for basement 19,000 Equipment purchased (subject to 2% cash discount, which was not taken) 65,000 Freight on equipment purchased 1,340 Storage charges on equipment, necessitated by non-completion of building when equipment was delivered 2,180 New building constructed (building construction took 6 months from date of purchase of land and old building) 485,000 Assessment by city for drainage project 1,600 Hauling charges for delivery of equipment from storage to new building 620 Installation of equipment 2,000 Trees, shrubs, and other landscaping after completion of building (permanent in nature) 5,400
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Land Buildings Equipment Other Abstract fees 520 Architects fees 3170 Cash ...View the full answer
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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