The following expenses relate to land, land improvements and buildings purchased on 1 November 2013. Cost of
Question:
The following expenses relate to land, land improvements and buildings purchased on 1 November 2013.
Cost of real estate acquired for a new production facility 365000
The land was valued at 262,800 and the building at 102,200.
Property taxes paid by the buyer 20,000
The cost of removing the barn is 8,500
Architect fees to update building 6750
Attorney's fee for closing the sale 12500
Land classification 3500
sidewalk parking 7000
planting trees and shrubs 9250
repair cost of the building due to the storm 1300
Lights placed in the driveway 4750
real estate agent fee 2500
1: Determine the cost of land, buildings, and improvements (round to nearest dollar) 10 points
2: Prepare journal entries for depreciation on December 31, 2013, assuming the building will have a useful life of 20 years and have no residual value. Use the double declining balance method and the six-month contract. 10 points
3: Depreciate land improvements using the straight-line method, with a life of 5 years, with a residual value of zero (in dollars) to the nearest month.
Accounting
ISBN: 978-0324401844
22nd Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac