Question
Drive and Fly near an airport, incurred the following costs to acquire land, make land improvements, and construct and furnish a small building: LOADING... (Click
Drive and Fly
near an airport, incurred the following costs to acquire land, make land improvements, and construct and furnish a small building:
LOADING...
(Click
the icon to view the financial data.)
Drive and Fly
depreciates land improvements over
20
years, buildings over
40
years, and furniture over
12
years, all on a straight-line basis with zero residual value.
Requirements
1.
Show how to account for each cost by listing the cost under the correct account. Determine the total cost of each asset.
2.
All construction was complete and the assets were placed in service on
August
1. Record partial-year depreciation for the year ended
December
31.
Requirements
1. | Show how to account for each cost by listing the cost under the correct account. Determine the total cost of each asset. |
2. | All construction was complete and the assets were placed in service on AugustAugust 1. Record partial-year depreciation for the year ended DecemberDecember 31. |
Requirement 1. Show how to account for each cost by listing the cost under the correct account. Determine the total cost of each asset.
Begin by listing each cost for items a. through i. first, followed by items j. through q. Then determine the total cost of each asset. (Leave any unused cells blank.)
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Totals |
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Requirement 2. All construction was complete and the assets were placed in service on
AugustAugust
1. Record partial-year depreciation for the year ended
DecemberDecember
31. (Record a single compound journal entry. Round all depreciation expense amounts to the nearest whole dollar. Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Date | Accounts and Explanation | Debit | Credit | ||
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Requirements
1. | Show how to account for each cost by listing the cost under the correct account. Determine the total cost of each asset. |
2. | All construction was complete and the assets were placed in service on AugustAugust 1. Record partial-year depreciation for the year ended DecemberDecember 31. |
Requirement 1. Show how to account for each cost by listing the cost under the correct account. Determine the total cost of each asset.
Begin by listing each cost for items a. through i. first, followed by items j. through q. Then determine the total cost of each asset. (Leave any unused cells blank.)
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b. |
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i. |
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j. |
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k. |
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l. |
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m. |
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n. |
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o. |
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p. |
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q. |
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Totals |
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Requirement 2. All construction was complete and the assets were placed in service on
AugustAugust
1. Record partial-year depreciation for the year ended
DecemberDecember
31. (Record a single compound journal entry. Round all depreciation expense amounts to the nearest whole dollar. Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Date | Accounts and Explanation | Debit | Credit | ||
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a.
Purchase price of three acres of land
$87,000
b.
Delinquent real estate taxes on the land to be paid by
Drive and Fly
5,800
c.
Additional dirt and earthmoving
8,400
d.
Title insurance on the land acquisition
3,500
e.
Fence around the boundary of the property
9,800
f.
Building permit for the building
600
g.
Architects fee for the design of the building
20,500
h.
Signs near the front of the property
9,500
i.
Materials used to construct the building
214,000
j.
Labor to construct the building
170,000
k.
Interest cost on construction loan for the building
9,100
l.
Parking lots on the property
29,200
m.
Lights for the parking lots
11,000
n.
Salary of construction supervisor (80% to building; 20%
to parking lot and concrete walks)
50,000
o.
Furniture
11,600
p.
Transportation of furniture from seller to the building
2,200
q.
Additional fencing
6,900
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