Safe Parking, near an airport, incurred the following costs to acquire land, make land improvements, and construct and furnish a small building:

Safe Parking depreciates land improvements over 15 years, buildings over 40 years, and furniture over 10 years, all on a straight-line basis with zero residual value.
Requirements
1. Set up columns for Land, Land Improvements, Building, and Furniture. Show how to account for each cost by listing the cost under the correct account. Determine the total cost of each asset.
2. All construction was complete and the assets were placed in service on September 1. Record partial-year depreciation expense for the year ended December 31. Round to the nearest dollar.

Transcribed Image Text:

$ 86,000 Purchase price of three acres of land a. b. Delinquent real estate taxes on the land to be paid by Safe Parking c. Additional dirt and earthmoving d. Title insurance on the land acquisition 6,300 8,400 3,400 Fence around the boundary of the property 9,600 e. f. Building permit for the building g. Architect's fee for the design of the building 900 20,100 h. Signs near the front of the property 9,000 Materials used to construct the building i. 217,000 j. Labor to construct the building 172,000 Interest cost on construction loan for the building k. 9,500 I. Parking lots on the property 29,400 m. Lights for the parking lots 11,600 Salary of construction supervisor (80% to building; 20% to parking lot and concrete walks) n. 80,000 11,700 Furniture O. p. Transportation of furniture from seller to the building q. Additional fencing 1,900 6,900