1. Allocating Payments and Receipts to Fixed Asset Accounts

The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk.

a.	Fee paid to attorney for title search	$3,500
b.	Cost of real estate acquired as a plant site: Land	363,900
	Building (to be demolished)	34,600
c.	Delinquent real estate taxes on property, assumed by purchaser	20,500
d.	Cost of tearing down and removing building acquired in (b)	5,700
e.	Proceeds from sale of salvage materials from old building	3,400*
f.	Special assessment paid to city for extension of water main to the property	13,600
g.	Architects and engineers fees for plans and supervision	50,000
h.	Premium on one-year insurance policy during construction	4,800
i.	Cost of filling and grading land	20,000
j.	Money borrowed to pay building contractor	853,400*
k.	Cost of repairing windstorm damage during construction	6,300
l.	Cost of paving parking lot to be used by customers	17,300
m.	Cost of trees and shrubbery planted	10,300
n.	Cost of floodlights installed on parking lot	1,200
o.	Cost of repairing vandalism damage during construction	2,800
p.	Proceeds from insurance company for windstorm and vandalism damage	6,800*
q.	Payment to building contractor for new building	909,800
r.	Interest incurred on building loan during construction	42,800
s.	Refund of premium on insurance policy (h) canceled after 11 months	400*

Required:

1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from the dropdown list for each letter and enter the appropriate amount. Enter receipts as negative amounts using the minus sign.

Item	Account	Amount
a.		$
b.		$
c.		$
d.		$
e.		$
f.		$
g.		$
h.		$
i.		$
j.		$
k.		$
l.		$
m.		$
n.		$
o.		$
p.		$
q.		$
r.		$
s.		$

2. Determine the amount debited to Land, Land Improvements, and Building.

Land	Land Improvements	Building
$	$	$

3. Since land used as a plant site lose its ability to provide services, it depreciated. Land improvements lose their ability to provide services as time passes and are therefore .

4. What would be the effect on the current years income statement and balance sheet if the cost of filling and grading land of $20,000 [payment (i)] was incorrectly classified as Land Improvements rather than Land? Assume that Land Improvements are depreciated over a 20-year life using the double-declining-balance method.

2. Transactions for Fixed Assets, Including Sale

The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used.

Year 1
Jan. 4	Purchased a used delivery truck for $15,360, paying cash.
Nov. 2	Paid garage $150 for miscellaneous repairs to the truck.
Dec. 31	Recorded depreciation on the truck for the year. The estimated useful life of the truck is 4 years, with a residual value of $3,200 for the truck.
Year 2
Jan. 6	Purchased a new truck for $9,000, paying cash.
Apr. 1	Sold the used truck purchased on Jan. 4 of Year 1 for $6,270. (Record depreciation to date in Year 2 for the truck.)
June 11	Paid garage $240 for miscellaneous repairs to the truck.
Dec. 31	Record depreciation for the new truck. It has an estimated residual value of $1,600 and an estimated life of 5 years.
Year 3
July 1	Purchased a new truck for $88,000, paying cash.
Oct. 2	Sold the truck purchased January 6, Year 2, for $3,480. (Record depreciation to date for Year 3 for the truck.)
Dec. 31	Recorded depreciation on the remaining truck purchased on July 1. It has an estimated residual value of $15,800 and an estimated useful life of eight years.

Required:

Journalize the transactions and the adjusting entries. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations. Round your final answers to the nearest cent.

Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $172,220, has an estimated useful life of 19 years, has an estimated residual value of $9,200, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fourth year? b. Assuming that the equipment was sold on April 1 of the fifth year for 129,085. 1. Journalize the entry to record depreciation for the three months until the sale date. Round your answers to the nerest whole dollar if required. 2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations