Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

At December 31, 2024, certain accounts included in the property, plant, and equipment section of Vaughn Company's balance sheet had the following balances. Land $239.600

image text in transcribed
At December 31, 2024, certain accounts included in the property, plant, and equipment section of Vaughn Company's balance sheet had the following balances. Land $239.600 Buildings 395,900 Leasehold improvements 660,200 Equipment 878,700 During 2025, the following transactions occurred. 1. Land site number 621 was acquired for $858.700. In addition, to acquire the land Vaughn paid a $57.400 commission to a real estate agent. Costs of $43,600 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $20,400. A second tract of land (site number 622) with a building was acquired for $417,000. The closing statement indicated that the land value was $297.100 and the building value was $119,900. Shortly after acquisition, the building was demolished at a cost of $41,400. A new building was constructed for $329.100 plus the following costs. Excavation fees $38.000 Architectural design fees 11 000 Building permit fee 2.500 Imputed interest on funds obtained from stock financing used during construction 8,600 The building was completed and occupied on September 30, 2025. 3. A third tract of land (site number 623) was acquired for $646,500 and was put on the market for resale. 4. During December 2025, costs of $89,300 were incurred to improve leased office space. The related lease will terminate on December 31, 2027, 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 $86,800, freight costs were $3.300, installation costs were $2,300, and royalty payments for 2025 were $17.700. (a) Calculate the balance at December 31, 2025 in each of the following balance sheet accounts. Disregard the related accumulated depreciation accounts. Balance at December 31, 2025 Land Buildings Leasehold improvements Equipment

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Horngrens Financial And Managerial Accounting

Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura

6th Edition

0134486838, 978-0134486833

More Books

Students also viewed these Accounting questions

Question

Describe how systematic method errors may be detected.

Answered: 1 week ago

Question

3. An initial value (anchoring).

Answered: 1 week ago

Question

4. Similarity (representativeness).

Answered: 1 week ago