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9-1 eBook Question Content Area Allocating payments and receipts to fixed asset accounts The following payments and receipts are related to land, land improvements, and

9-1

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Question Content Area

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.

Item Description Amount
a. Fee paid to attorney for title search $3,000
b. Cost of real estate acquired as a plant site: Land 290,000
b. Cost of real estate acquired as a plant site: Building (to be demolished) 50,000
c. Delinquent real estate taxes on property, assumed by purchaser 15,500
d. Cost of razing and removing building acquired in (b) 5,000
e. Proceeds from sale of salvage materials from old building 5,000*
f. Special assessment paid to city for extension of water main to the property 28,000
g. Architects and engineers fees for plans and supervision 60,000
h. Premium on 1-year insurance policy during construction 7,000
i. Cost of filling and grading land 11,000
j. Money borrowed to pay building contractor 800,000*
k. Cost of repairing windstorm damage during construction 5,000
l. Cost of paving parking lot to be used by customers 31,000
m. Cost of trees and shrubbery planted 11,000
n. Cost of floodlights installed on parking lot 1,000
o. Cost of repairing vandalism damage during construction 2,000
p. Proceeds from insurance company for windstorm and vandalism damage 8,000*
q. Payment to building contractor for new building 900,000
r. Interest incurred on building loan during construction 35,000
s. Refund of premium on insurance policy (h) canceled after 11 months 500*

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. LandLand ImprovementsBuildingOther Accounts $fill in the blank 2
b. LandLand ImprovementsBuildingOther Accounts $fill in the blank 4
c. LandLand ImprovementsBuildingOther Accounts $fill in the blank 6
d. LandLand ImprovementsBuildingOther Accounts $fill in the blank 8
e. LandLand ImprovementsBuildingOther Accounts $fill in the blank 10
f. LandLand ImprovementsBuildingOther Accounts $fill in the blank 12
g. LandLand ImprovementsBuildingOther Accounts $fill in the blank 14
h. LandLand ImprovementsBuildingOther Accounts $fill in the blank 16
i. LandLand ImprovementsBuildingOther Accounts $fill in the blank 18
j. LandLand ImprovementsBuildingOther Accounts $fill in the blank 20
k. LandLand ImprovementsBuildingOther Accounts $fill in the blank 22
l. LandLand ImprovementsBuildingOther Accounts $fill in the blank 24
m. LandLand ImprovementsBuildingOther Accounts $fill in the blank 26
n. LandLand ImprovementsBuildingOther Accounts $fill in the blank 28
o. LandLand ImprovementsBuildingOther Accounts $fill in the blank 30
p. LandLand ImprovementsBuildingOther Accounts $fill in the blank 32
q. LandLand ImprovementsBuildingOther Accounts $fill in the blank 34
r. LandLand ImprovementsBuildingOther Accounts $fill in the blank 36
s. LandLand ImprovementsBuildingOther Accounts $fill in the blank 38
image text in transcribed 2. Determine the amount debited to Land, Land Improvements, and Building. 3. Land used as a plant site lose its ability to provide services; thus, it depreciated. However, land improvements lose their ability to provide services as time passes and are, therefore, 4. What would be the effect on the income statement and balance sheet if the cost of filling and grading land of $11,000 [payment (i)] was incorrectly classifieuru inu uits rather than Land? Assume Land Improvements are depreciated over a 20-year life using the double-declining- balance method

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