On January 1, 2019 Stuff Inc. acquired land with a very old building on it to...
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On January 1, 2019 Stuff Inc. acquired land with a very old building on it to build a new plant. They made a $30,000 down payment and signed a non-interest bearing note for $245,000 that is due in 2 years from the purchase. An interest rate of 10% is implicit in the purchase price. On January 1, 2019 they paid their lawyer $1,100 to perform a title search on the property. On January 15, 2019 they paid a local demolition crew $15,000 to demolish the existing building. Stuff Inc. was able to recover $7,800 from materials salvaged. They began construction on February 1, 2019 and construction was completed in 5 months by July 1, 2019. On March 1, 2019 Machinery was purchased for $110,000 to manufacture "stuff". The Machinery was purchased with discount terms 2/10 n 30 On January 20, the Municipality paid Stuff Inc. a "Welcome Grant" of $20,000 to help with the construction of the new plant. The company also paid for the following additional expenditures during the year. ● Pre-construction survey $ 510 Landscaping, trees and shrubs (assume non- permanent in nature) Machinery assembly and installation Building construction costs Storage costs (due to construction not completed as scheduled) Interest costs for 2019 fiscal year covering period Jan 1 to Dec 31 (construction loan signed on January 1, 2019) Insurance coverage for the building relating to a 16-month period (Insurance coverage started and paid for on February 1, 2019) Architects fees ● ● ● 18,750 3,600 615,000 3,700 10,620 4,880 5,950 Required: Prepare a spreadsheet with columns for Description, Land, Buildings, Machinery and Other (see below). Assume company follows IFRS. DESCRIPTION LAND BUILDING MACHINE OTHER Determine the amounts that should be included in the cost of Land, Building, and Machinery for the company. If the cost does not fall under one of these asset accounts, indicate the account it should be debited to in the "other" category. In answering your question, please show the description of the expenditure with its related dollar amount. Show calculations if necessary. On January 1, 2019 Stuff Inc. acquired land with a very old building on it to build a new plant. They made a $30,000 down payment and signed a non-interest bearing note for $245,000 that is due in 2 years from the purchase. An interest rate of 10% is implicit in the purchase price. On January 1, 2019 they paid their lawyer $1,100 to perform a title search on the property. On January 15, 2019 they paid a local demolition crew $15,000 to demolish the existing building. Stuff Inc. was able to recover $7,800 from materials salvaged. They began construction on February 1, 2019 and construction was completed in 5 months by July 1, 2019. On March 1, 2019 Machinery was purchased for $110,000 to manufacture "stuff". The Machinery was purchased with discount terms 2/10 n 30 On January 20, the Municipality paid Stuff Inc. a "Welcome Grant" of $20,000 to help with the construction of the new plant. The company also paid for the following additional expenditures during the year. ● Pre-construction survey $ 510 Landscaping, trees and shrubs (assume non- permanent in nature) Machinery assembly and installation Building construction costs Storage costs (due to construction not completed as scheduled) Interest costs for 2019 fiscal year covering period Jan 1 to Dec 31 (construction loan signed on January 1, 2019) Insurance coverage for the building relating to a 16-month period (Insurance coverage started and paid for on February 1, 2019) Architects fees ● ● ● 18,750 3,600 615,000 3,700 10,620 4,880 5,950 Required: Prepare a spreadsheet with columns for Description, Land, Buildings, Machinery and Other (see below). Assume company follows IFRS. DESCRIPTION LAND BUILDING MACHINE OTHER Determine the amounts that should be included in the cost of Land, Building, and Machinery for the company. If the cost does not fall under one of these asset accounts, indicate the account it should be debited to in the "other" category. In answering your question, please show the description of the expenditure with its related dollar amount. Show calculations if necessary.
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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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