Ch 9 HW eBook Calculator Print Item Allocating Payments and Receipts to Fixed Asset Accounts The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk. a. Fee paid to attorney for title search $2,800 b. Cost of real estate acquired as a plant site: Land 298,600 Building (to be demolished) 28,400 16,800 4,700 2,800* 11,200 41,100 4,000 16,400 700,200* C. Delinquent real estate taxes on property, assumed by purchaser d. Cost of razing and removing building acquired in B e. Proceeds from sale of salvage materials from old building f. Special assessment paid to city for extension of water main to the property 9. Architect's and engineer's fees for plans and supervision h. Premium on one-year insurance policy during construction i. Cost of filling and grading land j. Money borrowed to pay building contractor k. Cost of repairing windstorm damage during construction I. Cost of paving parking lot to be used by customers m. Cost of trees and shrubbery planted n. Cost of floodlights installed on parking lot 0. Cost of repairing vandalism damage during construction Proceeds from insurance company for windstorm and vandalism damage q. Payment to building contractor for new building r. Interest incurred on building loan during construction s. Refund of premium on insurance policy (h) canceled after 11 months 5,200 14,200 8,400 1,000 2,300 5,600* 746,500 35,100 333* Required: 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct accoun the dropdown list for each letter and enter the appropriate amount. Enter receipts as negative amounts using the minus sign. Item Account Amount Land Land Land Land Land Land Building Building Land Other Accounts Other Accounts Land Improvements Land Improvements Land Improvements Other Accounts Other Accounts Building Building Building 2. Determine the amount debited to Land, Land Improvements, and Building. Land Land Improvements Building depreciated. Land improvements do lose their ability 3. Since land used as a plant site does not lose its ability to provide services, it is not to provide services as time passes and are therefore depreciated 4. What would be the effect on the income statement and balance sheet if the cost of filling and grading land of $16,400 (payment (1) was incorrectly classified as Land Improvements rather than Land? Assume Land Improvements are depreciated over a 20-year life using the double-declining-balance method. Depreciation expense would be overstated & Land improvements would be overstated. Feedback