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 apparel business. The receipts are identified by an asterisk. a. Fee paid to attorney for title search $3,300 b. Cost of real estate acquired as a plant site: Land 349,400 Building (to be demolished) 33,200 c. Finder's fee paid to real estate agency 19,700 d. Delinquent real estate taxes on property, assumed by purchaser 5,500 e. Architect's and engineer's fees for plans for new building 3,300 f. Cost of removing building purchased with land in (b) 13,100 g. Proceeds from sale of salvage materials from old building 48,000* h. Cost of filling and grading land 4,600 i. Premium on 1-year insurance policy during construction 19,200 j. Money borrowed to pay building contractor 819,400* k. Special assessment paid to city for extension of water main to the property 6,000 I. Cost of repairing windstorm damage during construction 16,600 m. Cost of repairing vandalism damage during construction n. Cost of trees and shrubbery planted o. Cost of paving parking lot to be used by customers p. Interest incurred on building loan during construction q. Proceeds from insurance company for windstorm and vandalism damage Payment to building contractor for new building s. Refund of premium on insurance policy (i) canceled after 11 months 9,900 1,100 2,700 6,600 41,100* 873,600 383* 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 a. Land b. Land c. Land Amount 3,300 316,200 X 19,700 d. Land 5,500 e. Building 3,300 f. Land 13,100 9- Land 48,000 X h. Land i. Building j. Other Accounts 4,600 19,200 819,400 X k. Land 6,000 1. Other Accounts S 16,600 m. Other Accounts 9,900 . Land Improvements 1,100 0. Land Improvements 2,700 p. Building 6,600 q. Other Accounts 41,100 X . Building 873,600 5. Building 383 X Land 2. Determine the amount debited to Land, Land Improvements, and Building. Land Improvements $ 416,400 x $ 3,800 Building 903,083 x . 3. Since land used as a plant site does not depreciated lose its ability to provide services, it is not depreciated. Land improvements do 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 $19,200 [payment (i)] was incorrectly classified as Land Improvements rather than Land? Assume Land Improvements are depreciated over a 20-year life using the double-declining-balance method. Depreciation expense would be overstated & Land improvements would be overstated