Question
In 2020, Ramsey Properties paid $540,000 for a tract of land on which two buildings were located. The plan was to demolish Building A and
In 2020, Ramsey Properties paid $540,000 for a tract of land on which two buildings were located. The plan was to demolish Building A and build a new factory (Building C) in its place. Building B was to be used as a company office and was appraised at a value of $189,108. A lighted parking lot near Building B had improvements valued at $50,058. Without considering the buildings or improvements, the tract of land was estimated to have a value of $317,034.
The company incurred the following additional costs:
Costs to demolish Building A | $46,800 |
Cost to landscape new building site | $69,000 |
Cost to construct new building (Building C) | 542,400 |
Cost of new land improvements (Land Improvements C) | 40,500 |
Required:
- Prepare a schedule having the following column headings: Land, Building B, Building C, Land Improvements B, and Land Improvements C. Allocate the costs incurred by the company to the appropriate columns and total each column.
- Prepare a single journal entry dated June 1 to record all of the incurred costs, assuming they were paid in cash on that date.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started