Assume Martin's Moving & Storage Ltd. (MMS) of Regina, Saskatchewan, incurred the following costs in acquiring land, making land improvements, and constructing and furnishing its own storage warehouse: A (Click the icon to view the costs of items a. to i.) (Click the icon to view the costs of items j. to q.) Requirements Requirement 1. Show how to account for each of MMS's costs by listing the cost under the correct account. Determine 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. (Hold all decimals for interim calculations. Round your final answers to the nearest dollar. Leave any unused cells blank.) a. Purchase price of 4 acres of land, including an old building that will be used for an office (land fair value is $295,000, building fair value is $72,000) $325,000 b. Landscaping (additional dirt and earth moving) 10.600 c. Fence around the land. 18,770 d. Lawyer fee for title search on the land. 1,500 e. Delinquent real estate taxes on the land to be paid by MMS. 7,900 f. Company signs at front of the company property. 3,500 g. Building permit for the warehouse. 930 h. Architect fee for the design of the warehouse. 21,910 i. Masonry, carpentry, roofing, and other labour to construct the warehouse 825,000 Assume MMS depreciates buildings over 40 years, land improvements over 20 years, and furniture over 8 years, all on a straight-line basis with zero residual value. Land Improvements Office Building Item Land Warehouse Furniture j. Renovation of the office building. $38,500 k. Interest cost on construction loan for warehouse.................. 9,100 1. Landscaping (trees and shrubs)... 7,600 m. Parking lot, concrete walks, and lights on the property........ 56,100 n. Concrete, wood, and other materials used in the construction of the warehouse.. 230,000 o. Supervisory salary of construction supervisor (85% to warehouse, 5% to land improvements, 10% to office building) 67,000 p. Office furniture 112,100 q. Transportation and installation of furniture................. 2,800 Assume MMS depreciates buildings over 40 years, land improvements over 20 years, and furniture over 8 years, all on a straight-line basis with zero residual value. X Requirements - 1. Show how to account for each of MMS's costs by listing the cost under the correct account. Determine the total cost of each asset. Assuming that all construction was complete and the assets were placed in service on September 1, 2017, record depreciation for the year ended December 31, 2017. Round to the nearest dollar. Identify the management issues included in this problem and what effect they have on business operations. 3
