Allocating Payments and Receipts to Fixed Asset Accounts The following payments and receipts are related to land, land improvements, and buldings acquired for use in a wholesale ceramic business. The recelpts are identified an asterisk. a. Fee paid to attormey for title search $3,100 b. Cost of real estate acquired as a plant site: Land 325,200 Building (to be demolished) 30,900 Delinquent real estate taxes on property, assumed by purchaser C. 18,300 Cost of tearing down and removing building acqulred in (b) 5,100 Proceeds from sale of salvage materials from old building 3,000 f. Special assessment paid to city for extension of water main to the property 12,200 g. Architect's and engineer's fees for plans and supervision 44,700 h. Premium on one-year insurance policy during construction 4,300 1. Cost of filling and grading land 17,900 J. Money borrowed to pay building contractor 762,600* k. Cost of repairing windstorm damage during construction 5,600 L. Cost of paving parking lot to be used by customers 15,400 m. Cost of trees and shrubbery planted 9,200 n. Cost of floodlights installed on parking lot 1,100 Cost of repairing vandalism damage during construction O. 2,500 p. Proceeds from insurance company for windstorm and vandalism damage 6,100 q. Payment to building contractor for new bulding 813,000 Interest incurred on building loan during construction . 38,200 S. Refund of premium on insurance policy (h) cancelet after 11 months eBook Calculator Refund of premlum on Insurance policy (h) canceled after 11 months S. 358* Requlred: 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from th 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. 9- h. k. n. p. (Previous Next Check My Work eBook Calculator h. m. n. 0. 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 year's income statement and balance sheet if the cost of filling and grading land of $17,900 (payment (0)) 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, Previous Next Check My Work Allorkawnd Allocating Payments and Recelpts to Fixed Asset Accounts The following payments and recelpts are related to land, land improvements, and bulldings acquired for use in a wholesale ceramic business. The an asterisk. a. Fee paid to attorney for title search $3,100 b. Cost of real estate acquired as a plant site: Land 325,200 Bulding (to be demolished) 30,900 Delinquent real estate taxes on property, assumed by purchaser C. 18,300 d. Cost of tearing down and removing building acquired in (b) 5,100 e. Proceeds from sale of salvage materials from old building 3,000 f. Special assessment paid to city for extension of water main to the property 12,200 9. Architect's and engineer's fees for plans and supervision 44,700 h. Premium on one-year insurance policy during construction 4,300 Cost of filling and grading land 1. 17,900 j. Money borrowed to pay building contractor 762,600* k. Cost of repairing windstorm damage during construction 5,600 Cost of paving parking lot to be used by customers m. Cost of trees and shrubbery planted 1. 15,400 9,200 Cost of floodlights installed on parking lot n. 1,100 O. Cost of repairing vandalism damage during construction 2,500 p. Proceeds from insurance company for windstorm and vandalism damage 6,100* 9. Payment to building contractor for new building 813,000 Interest incurred on building loan during construction 38,200 S. Refund of premium on insurance policy (h) canceled after 11 months 358
