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. b. Fee paid to attorney for title search Cost of real estate acquired as a plant site: Land Building to be demolished) $3,800 395,700 37,600 22.300 6,200 3,700 C. Delinquent real estate taxes on property, assumed by purchaser d. Cost of tearing down and removing building acquired in (b) e. Proceeds from sale of salvage materials from old building f. Special abessment paid to city for extension of water main to the property 14,800 54,400 5,200 21,800 928,000 6,800 18,300 9. Architect's and engineer's fees for plans and supervision h. Premium on one-year insurance policy during construction Cost of filing and grading land 1. Money borrowed to pay building contractor k. Cost of repairing windstorm damage during construction I cost of paving parking lot to be used by customers m. Cost of trees and shrubbery planted n. Cost of floodlights installed on parking lot 0 cost of repairing vandalism damage during construction p. Proceeds from insurance company for windstorm and vandalism damage 9. Payment to building contractor for new building 1. Interest incurred on bu ding loan during construction 5. Refund of premium on insurance policy (h) canceled after 11 months 11,200 1.300 3,100 7,400 989,300 46,500 433 Required! 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Huilding, 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 Land 3,800 433,300 Land & Land 22,300 Land 6,200 Land v 3,700 X Land 14,800 Building 54,400 Building 5,200 Land 21,800 Other Accounts 921,000 Other Accounts 5,800 Land Improvements 18,800 Land Improvements 11.200 Land Improvements 1.300 Other Accounts 3.100 Other Accounts 7,400 Building 989, 100 5.200 Land & Other Accounts 92.000 Other Accounts NOO Land Improvements 1.300 Land Improvements Land Improvements 1.100 Other Accounts 5 3 .100 Other Accounts 7.400 Building 989,300 Building 5 46,500 Building 2. Determine the amount debited to Land, Land improvements, and Land Land Improvements Building 3. Since landed as a plant te does not e a t to provide se do y lose their ability to provide Services as time passes and are therefore depreciated 4. What would be the effect on the current year's income statement and balance sheet niling and grading and of $21,800 (payment was incorrectly classified as Land Improvements rather than Land? Assume that and Improvements are depreciated over 20 year we using the doubledecing balance method Depreciation expense would be overstated and improvements would be overstated
