a. Purchase price of land, including an old building that will be used for a garage (and market value is $330,000; building market value is $70,000) b. Grading (leveling) land Fence around the land d. Attorney fee for title search on the land e. Delinquent real estate taxes on the land to be paid by Money Store f. Company signs at entrance to the property g. Building permit for the sales building C. $ 340,000 8,900 31,600 600 5,400 1,500 200 1. Identify the proper account (Land, Land Improvements, Sales Building, Garage Building, or Furniture) for each of the costs listed in the problem. Calculate the total cost of each asset. 2. All construction was complete and the assets were placed in service on April 2. Record depreciation for the year ended December 31. Round to the nearest dollar 3. Why would a manager need to understand the concepts covered in this problem? Money Store, Inc., opened an office in Winona, Minnesota. Money Store incurred the following costs in acquiring land, making land improvements, and constructing and furnishing the new sales building: E: (Click the icon to view the financial data.) The company depreciates buildings over 30 years, land improvements over 20 years, and furniture over 12 years, all on a straight-line basis with residual values of zero. Read the requirements Requirement 1. Identify the proper account (Land, Land Improvements, Sales Building, Garage Building, or Furniture) for each of the costs listed in the problem. Calculate the total cost of each asset. Start with items a through i, next, enter items j through q, and lastly calculate the totals for each asset category. (If an input field is not used in the table leave the field empty; do not enter a zero. Round percentages to two places when calculating proportions (X.XX%), and use your computed percentages throughout. Round your final answers to the nearest whole dollar.) Land Sales Garage Building Item Land Improvements Building Furniture a. b. C. d. e. f. g. h. i. Land Sales Garage Building Item Land Improvements Building Furniture j. k. m. n. 0. p. q. Totals Requirement 2. All construction was complete and the assets were placed in service on April 2. Record depreciation for the year ended December 31. Round to the nearest dollar. (Record debits first, then credits. Exclude explanations from journal entries. Do not round intermediary calculations Only round the amount you input in the cell to the nearest dollar.) Start by recording the depreciation on the land improvements. Journal Entry Date Accounts Debit Credit Dec 31 Next, record the sales building depreciation expense. Journal Entry Accounts Date Debit Credit Dec 31 Now record the garage building depreciation expense. Journal Entry Accounts Date Debit Credit Dec 31 Finish by recording the furniture depreciation expense. Journal Entry Date Accounts Debit Credit Dec 31 3 Requirement 3. Why would a manager need to understand the concepts covered in this problem? This problem shows how to determine the cost of a asset. It also demonstrates the computation of for a variety of those assets, which affects Because virtually all businesses use these assets, a manager needs to understand how those assets' costs and computations are determined. Managers need to understand the meaning, components, and computation of because often their performance is measured by this amount. a. Purchase price of land, including an old building that will be used for a garage (and market value is $330,000; building market value is $70,000) b. Grading (leveling) land Fence around the land d. Attorney fee for title search on the land e. Delinquent real estate taxes on the land to be paid by Money Store f. Company signs at entrance to the property g. Building permit for the sales building C. $ 340,000 8,900 31,600 600 5,400 1,500 200 1. Identify the proper account (Land, Land Improvements, Sales Building, Garage Building, or Furniture) for each of the costs listed in the problem. Calculate the total cost of each asset. 2. All construction was complete and the assets were placed in service on April 2. Record depreciation for the year ended December 31. Round to the nearest dollar 3. Why would a manager need to understand the concepts covered in this problem? Money Store, Inc., opened an office in Winona, Minnesota. Money Store incurred the following costs in acquiring land, making land improvements, and constructing and furnishing the new sales building: E: (Click the icon to view the financial data.) The company depreciates buildings over 30 years, land improvements over 20 years, and furniture over 12 years, all on a straight-line basis with residual values of zero. Read the requirements Requirement 1. Identify the proper account (Land, Land Improvements, Sales Building, Garage Building, or Furniture) for each of the costs listed in the problem. Calculate the total cost of each asset. Start with items a through i, next, enter items j through q, and lastly calculate the totals for each asset category. (If an input field is not used in the table leave the field empty; do not enter a zero. Round percentages to two places when calculating proportions (X.XX%), and use your computed percentages throughout. Round your final answers to the nearest whole dollar.) Land Sales Garage Building Item Land Improvements Building Furniture a. b. C. d. e. f. g. h. i. Land Sales Garage Building Item Land Improvements Building Furniture j. k. m. n. 0. p. q. Totals Requirement 2. All construction was complete and the assets were placed in service on April 2. Record depreciation for the year ended December 31. Round to the nearest dollar. (Record debits first, then credits. Exclude explanations from journal entries. Do not round intermediary calculations Only round the amount you input in the cell to the nearest dollar.) Start by recording the depreciation on the land improvements. Journal Entry Date Accounts Debit Credit Dec 31 Next, record the sales building depreciation expense. Journal Entry Accounts Date Debit Credit Dec 31 Now record the garage building depreciation expense. Journal Entry Accounts Date Debit Credit Dec 31 Finish by recording the furniture depreciation expense. Journal Entry Date Accounts Debit Credit Dec 31 3 Requirement 3. Why would a manager need to understand the concepts covered in this problem? This problem shows how to determine the cost of a asset. It also demonstrates the computation of for a variety of those assets, which affects Because virtually all businesses use these assets, a manager needs to understand how those assets' costs and computations are determined. Managers need to understand the meaning, components, and computation of because often their performance is measured by this amount
