Drive and Fly

near anairport, incurred the following costs to acquireland, make landimprovements, and construct and furnish a smallbuilding:

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Drive and Fly

depreciates land improvements over

20

years, buildings over

40

years, and furniture over

12

years, all on astraight-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. Recordpartial-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.) Item a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. q. Land Land Improvements Building Furniture Totals 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 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. Architect's 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