Question
At December 31, 2019, certain accounts included in the property, plant, and equipment section of Wildhorse Companys balance sheet had the following balances. Land $235,700
At December 31, 2019, certain accounts included in the property, plant, and equipment section of Wildhorse Companys balance sheet had the following balances.
Land | $235,700 | |
Buildings | 906,100 | |
Leasehold improvements | 669,100 | |
Equipment | 883,800 |
During 2020, the following transactions occurred.
1. | Land site number 621 was acquired for $850,000. In addition, to acquire the land Wildhorse paid a $53,900 commission to a real estate agent. Costs of $41,100 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $14,200. | |
2. | A second tract of land (site number 622) with a building was acquired for $418,800. The closing statement indicated that the land value was $299,500 and the building value was $119,300. Shortly after acquisition, the building was demolished at a cost of $40,800. A new building was constructed for $327,400 plus the following costs. |
Excavation fees | $38,100 | |
Architectural design fees | 10,900 | |
Building permit fee | 2,400 | |
Imputed interest on funds used during construction (stock financing) | 8,600 |
The building was completed and occupied on September 30, 2020.
3. | A third tract of land (site number 623) was acquired for $651,600 and was put on the market for resale. | |
4. | During December 2020, costs of $88,800 were incurred to improve leased office space. The related lease will terminate on December 31, 2022, and is not expected to be renewed. (Hint: Leasehold improvements should be handled in the same manner as land improvements.) | |
5. | A group of new machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machines was $87,500, freight costs were $3,300, installation costs were $2,400, and royalty payments for 2020 were $17,600. |
(a) Calculate the balance at December 31, 2020 in each of the following balance sheet accounts. Disregard the related accumulated depreciation accounts.
Balance at December 31, 2020 | ||
---|---|---|
Land | $enter a dollar amount | |
Buildings | $enter a dollar amount | |
Leasehold Improvements | $enter a dollar amount | |
Equipment | $enter a dollar amount |
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