Exercise 10-5

Grouper Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment.

Abstract companys fee for title search				$988
Architects fees				6,023
Cash paid for land and dilapidated building thereon				165,300
Removal of old building		$38,000
Less: Salvage		10,450		27,550
Interest on short-term loans during construction				14,060
Excavation before construction for basement				36,100
Machinery purchased (subject to 2% cash discount, which was not taken)				104,500
Freight on machinery purchased				2,546
Storage charges on machinery, necessitated by noncompletion of
building when machinery was delivered				4,142
New building constructed (building construction took 6 months from
date of purchase of land and old building)				921,500
Assessment by city for drainage project				3,040
Hauling charges for delivery of machinery from storage to new building				1,178
Installation of machinery				3,800
Trees, shrubs, and other landscaping after completion of building
(permanent in nature)				10,260

Determine the amounts that should be debited to Land, to Buildings, and to Machinery and Equipment. Assume the benefits of capitalizing interest during construction exceed the cost of implementation. Company uses net method to record discount. (Please leave spaces blank if there is no answer. Do not enter zeros in those spaces.)