Down ham Industries recently completed several transactions relating to plant assets. For each transaction described, determine the
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A. Down ham purchased a parcel of land on which it will construct a manufacturing facility. The purchase price of $ 155,000 included survey fees of $ 2,700, a title document costing $ 800, and brokers’ fees of $ 7,500. Down ham also incurred $ 10,500 in blasting costs to prepare the land for construction of the building.
B. Down ham constructed the manufacturing facility referred to in part (A). Materials and labor costs amounted to $ 278,000, the architect’s fee was $ 18,500, and the necessary permits totaled $ 3,600. Insurance carried during the construction was $ 2,300, and interest on the construction loan amounted to $ 14,200.
C. Down ham paid the following bills relating to the use of its plant assets:
(1) Annual real estate taxes, $ 14,250.
(2) Annual insurance premiums, $ 8,380.
(3) Annual mortgage payments, $ 124,800, of which $ 61,700 was interest.
(4) Painting of the outside of the buildings, $ 7,200.
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Related Book For
Introduction to Accounting An Integrated Approach
ISBN: 978-0078136603
6th edition
Authors: Penne Ainsworth, Dan Deines
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