Question
Blue Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $145,200 in
Blue Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $145,200 in cash. In addition, it paid $2,640 in surveying costs and $4,320 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $720 being received from the sale of materials. Architectural plans were also formalized on December 1, 2017, when the architect was paid $33,600. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2018 as follows.
Date of Payment Amount of Payment March 1 $260,400 May 1 331,200 July 1 64,800
The building was completed on July 1, 2018. To finance construction of this plant, Blue borrowed $609,600 from the bank on December 1, 2017. Blue had no other borrowings. The $609,600 was a 10-year loan bearing interest at 9%. Compute the balance in each of the following accounts at December 31, 2017, and December 31, 2018.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started