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 Fee paid to attorney for title search $2,800 b Cost of real estate acquired as a plant site Land 291,300 Building (to be demolished) 27,700 c Delinquent real estate taxes on property, assumed by purchaser 16,400 d Cost of tearing down and removing building acquired in (b) 4,600 e Proceeds from sale of salvage materials from old building 2,700 f Special assessment paid to city for extension of water main to the property 10,900 g Architects and engineers fees for plans and supervision 40,100 h Premium on one year insurance policy during construction 3,900 i Cost of filling and grading land 16,000 j Money borrowed to pay building contractor 683,100 k Cost of repairing windstorm damage during construction 5,000 l Cost of paving parking lot to be used by customers 13,800 m Cost of trees and shrubbery planted 8,200 n Cost of floodlights installed on parking lot 900 o Cost of repairing vandalism damage during construction 2,300 p Proceeds from insurance company for windstorm and vandalism damage 5,500 q Payment to building contractor for new building 728,300 r Interest incurred on building loan during construction 34,200 s Refund of premium on insurance policy (h) canceled after 11 months 325 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 $ b $ c $ d $ e $ f $ g $ h $ i $ j $ k $ l $ m $ n $ o $ 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 years income statement and balance sheet if the cost of filling and grading land of $16,000 payment (i) 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

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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

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.	Fee paid to attorney for title search	$2,800
b.	Cost of real estate acquired as a plant site: Land	291,300
	Building (to be demolished)	27,700
c.	Delinquent real estate taxes on property, assumed by purchaser	16,400
d.	Cost of tearing down and removing building acquired in (b)	4,600
e.	Proceeds from sale of salvage materials from old building	2,700*
f.	Special assessment paid to city for extension of water main to the property	10,900
g.	Architects and engineers fees for plans and supervision	40,100
h.	Premium on one-year insurance policy during construction	3,900
i.	Cost of filling and grading land	16,000
j.	Money borrowed to pay building contractor	683,100*
k.	Cost of repairing windstorm damage during construction	5,000
l.	Cost of paving parking lot to be used by customers	13,800
m.	Cost of trees and shrubbery planted	8,200
n.	Cost of floodlights installed on parking lot	900
o.	Cost of repairing vandalism damage during construction	2,300
p.	Proceeds from insurance company for windstorm and vandalism damage	5,500*
q.	Payment to building contractor for new building	728,300
r.	Interest incurred on building loan during construction	34,200
s.	Refund of premium on insurance policy (h) canceled after 11 months	325*

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.		$
b.		$
c.		$
d.		$
e.		$
f.		$
g.		$
h.		$
i.		$
j.		$
k.		$
l.		$
m.		$
n.		$
o.		$
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 years income statement and balance sheet if the cost of filling and grading land of $16,000 [payment (i)] 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.