Fidelity Union Insurance Company incurred the following costs in acquiring land, making land improvements, and constructing and furnishing an office building.

Fidelity Union depreciates buildings over 40 years, land improvements over 20 years, and furniture over eight years, all on a straight-line basis with zero residual value.
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1. Set up columns for Land, Land Improvements, Office Bu1lding, Storage Building, and Furniture. Show how to account for each of the foregoing costs by listing the cost under the correct account. Compute the total amount that would be debited to each account.
2. Assuming that all construction was complete and the assets were placed in service on May 4, record depreciation for the year ended December 31. Round off figures to the nearest dollar.
3. How will what you learned in this problem help you manage a business?

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a. Purchase price of four acres of land, including an old building that will be used for storage (land market value is $280,000; building market value is $20,000)....... $216,000 b. Landscaping (additional dirt and earth moving)... 8.100 c. Fence around the boundary of the land 17,650 d. Attorney fee for title search on the land... 600 e. Delinquent real estate taxes on the land to be paid by Fidelity Union. 5,900 f. Company signs at front of the company property. 1,800 g. Building permit for the office building... 350 h. Architect fee for the design of the office building... 19,800 i. Masonry, carpentry, roofing, and other labor to construct the office building. 709,000 j. Concrete, wood, steel girders, and other materials used in the construction of the office building.. 214,000 property. k. Renovation of the storage building. 1. Repair of storm damage to storage building during construction m. Landscaping (trees and shrubs)........ n. Parking lot and concrete walks on t the o. Lights for the parking lot, walkways, and company signs... p. Supervisory salary of construction supervisor (85 percent to office building. 9 percent to fencing, parking lot, and concrete walks; and 6 percent to storage building renovation).. q. Office furniture for the office building.. r. Transportation and installation of furniture... 40,000 107,100 1,800 41,800 2,200 6,400 29,750 7,300