Assume Midnight 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: Items a. To i. Items j. To q. a. Purchase price of 4 acres of land, including an old building that will be used for an office (land fair value is $285,000, building fair value is $70,000).... $315,000 b. Landscaping (additional dirt and earth moving).............. 10,600 c. Fence around the land.... 18,720 d. Lawyer fee for title search on the land.. 600 e. Delinquent real estate taxes on the land to be paid by MMS. 7,800 f. Company signs at front of the company property....... 3,600 g. Building permit for the warehouse.. 970 h. Architect fee for the design of the warehouse.. 21,900 i. Masonry, carpentry, roofing, and other labour to construct the warehouse.... 815,000 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. j. Renovation of the office building.... $38,400 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........ 56,200 n. Concrete, wood, and other materials used in the construction of the warehouse..... 238,000 o. Supervisory salary of construction supervisor (85% to warehouse, 5% to land improvements, 10% to office building) 62,000 p. Office furniture.......... 112,100 q. Transportation and installation of furniture.. 2,000 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. Requirement 1. Show how to account for each of MMS's costs by listing the cost under the corect account. Determine the total cost of sach Essat, (Hold all decimals for Interim calculations, Round your final answers to the nearest dollar. Leave any unused cells blank.) Land Item Land Improvements Warehouse Office Building Furniture a. b. 9 m n . Totale III 1 III Requirement 2. Assuming that all construction was complete and the assets were placed in service on September 1, 2020, record depreciation for the year ended December 31, 2020. Begin with land improvements depreciation. (Record debits first, then credits. Explanations are not required. Hold all decimals for Interim calculations. Round your final answer to the nearest dollar.) Date Accounts Debit Credit Dec. 31 Now, complete the entry for the warehouse depreciation. (Hold all decimals for Interim calculations. Round your final answer to the nearest dollar.) Date Accounts Debit Credit Dec. 31 Next, complete the entry for the office building depreciation. (Hold all decimals for interim calculations. Round your final answer to the nearest dollar.) Date Credit Accounts Debit Dec. 31 Complete the entry for the furniture depreciation. (Hold all decimals for interim calculations. Round your final answer to the nearest dollar.) Date Accounts Deblt Credit Dec. 31 Requirement 3. Identify the management issues included in this problem and what effect they have on business operations. This problem shows how to determine the cost of a manager needs to understand how those assets' It also demonstrates the computation of depreciation for Managers need to understand the meaning, components, and computation of Because virtually all businesses use because often their performance is measured by how much costs and depreciation amounts are determined. Depreciation affects the business earns
