Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Current Attempt in Progress At December 31, 2024, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet had

image text in transcribed

Current Attempt in Progress At December 31, 2024, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet had the following balances. Land Buildings $230,000 890,000 Leasehold improvements 660,000 Equipment 875,000 During 2025, the following transactions occurred. 1. 2. Land site number 621 was acquired for $850,000. In addition, to acquire the land Reagan paid a $51,000 commission to a real estate agent. Costs of $35,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $13,000. A second tract of land (site number 622) with a building was acquired for $420,000. The closing statement indicated that the land value was $300,000 and the building value was $120,000. Shortly after acquisition, the building was demolished at a cost of $41,000. A new building was constructed for $330,000 plus the following costs. Excavation fees Architectural design fees Building permit fee $38,000 11,000 2,500 Imputed interest on funds obtained from stock financing used during construction 8,500 The building was completed and occupied on September 30, 2025. 3. A third tract of land (site number 623) was acquired for $650,000 and was put on the market for resale. 4. 5. During December 2025, costs of $89,000 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.) 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 $87,000, freight costs were $3,300, installation costs were $2,400, and royalty payments for 2025 were $17,500. (a) Calculate the balance at December 31, 2025 in each of the following balance sheet accounts. Disregard the related accumulated depreciation accounts. Land Balance at December 31, 2025 $ 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

Step: 3

blur-text-image

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

Fundamental Managerial Accounting Concepts

Authors: Edmonds, Tsay, olds

6th Edition

71220720, 78110890, 9780071220729, 978-0078110894

More Books

Students also viewed these Accounting questions

Question

Why do some individuals confess to a crime they did not commit?

Answered: 1 week ago