Coffe House Inc opened an office in Maple Grove, Minnesota. Coffe house incurred the following costs in aquiring land, making land improvements, and constructing and furnishing the new sales building.

The company depreciates buildings over 50 years, land improvements over 25 years, and furniture over 12 years, all on a straight-line basis with zero residual value.

Requirement 1. Identify the proper account (Land, land improvements, sales building, garage building, or furniture) for each of the costs listed in the problem. Calculate the total cost of each asset. Start with items a through i, next, enter items j through q, lastly calculate the totals for each category.

Requirement 2. All construction was complete and the assets were placed in service on April 2. Record depreciation for the year ended December 31. Round to the nearest dollar.

Start by recording the depreciation on the land improvments.

Next, record the sales building depreciation expense.

Now record the garage building depreciation expense.

Finish by recording the furniture depreciation expense.

Requirement 3. Why would a manager need to understand the concepts covered in this problem?

This problem shows how to determine the cost of a ____ asset. It also demonstrates the computation of ______ for a variety if those assets, which affects _______. Because virtually all businesses use these assets, a manager needs to understand how those assets costa and consumptions are determined. Managers need to understand the meaning, components, and computation of ______ because often their performance is measured by this amount.

Data Table a C. Purchase price of land, including an old building that will be used for a garage (land market value is $315,000, building market value is $85,000) b. Grading (leveling) land Fence around the land d. Attorney fee for title search on the land e Delinquent real estate taxes on the land to be paid by Coffee House f. Company signs at entrance to the property g Building permit for the sales building h. Architect fee for the design of the sales building i Masonry carpentry and roofing of the sales building i Renovation of the garage building $ 360,000 8,200 31,900 1.000 5.100 1,100 300 15,720 513,000 31 580 Print Done i Data Table T. 1.100 300 15,720 company signs ar entrance to the property 9. Building permit for the sales building h. Architect fee for the design of the sales building i Masonry, carpentry, and roofing of the sales building 1 Renovation of the garage building k. Interest cost on construction loan for sales building 1 Landscaping (trees and shrubs) m Parking lot and concrete walks on the property n. Lights for the parking lot and walkways Salary of construction supervisor (86% to sales building 10% to land improvements and 4% to garage building renovations) p Office furniture for the sales building q Transportation and installation of furniture 513,000 31,580 9.700 6.900 52,300 7 100 0 48.000 79.900 4.100 Print Done Coffee House opened an office in Maple Grove Minnesota Coffee Home med followers was making and movements, and constructing and using the new ock the icon to view the financial data) The company depreciates buildings over 50 years, and improvements over 25 years and future over 12 years, alontwine basis wivedules of c/ Requirement 1. 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