Question

The following cases are independent.
Case A Timmis Limited bought a building for $ 2,120,000. Before using the building, the following expenditures were made:
Repair and renovation of building .............. $ 210,000
Construction of new paved driveway.............. 55,000
Upgraded landscaping ................... 8,400
Installation of high- speed cable................. 32,000
Deposits with utilities for connections.............. 5,000
Sign for front and back of building, attached to roof....... 26,000
Installation of fence around property.............. 28,000

Case B Ling Company purchased a $ 65,000 tract of land for a new manufacturing facility. Ling demolished an old building on the property and sold the materials it salvaged from the demolition. Ling incurred additional costs and realized salvage proceeds as follows:
Demolition of old building .............. $ 62,000
Routine maintenance ( mowing) done on purchase..... 5,000
Proceeds from sale of salvaged materials........ 22,400
Legal fees ..................... 18,000
Title guarantee insurance............... 11,200

Required:
1. What balance would Timmis report in the building account?
2. What balance should Ling report in the land account?
3. If any items in the list above are excluded from the building and land accounts, indicate the appropriate classiication.



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  • CreatedFebruary 17, 2015
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