Question
In 2021, Sheridan Company had the following transactions related to the purchase of a property. All transactions were for cash unless otherwise stated. Jan. 12
In 2021, Sheridan Company had the following transactions related to the purchase of a property. All transactions were for cash unless otherwise stated.
| Jan. 12 | Purchased real estate for a future plant site for $406,000, paying $86,000 cash and signing a note payable for the balance. On the site, there was an old building. The fair values of the land and building were $396,000 and $36,000, respectively. The old building will be demolished and a new one built. | |
| 16 | Paid $7,600 for legal fees on the real estate purchase. | |
| 31 | Paid $35,000 to demolish the old building to make room for the new plant. | |
| Feb. 13 | Received $8,600 for residual materials from the demolished building. | |
| 28 | Graded and filled the land in preparation for the construction for $7,600. | |
| Mar. 14 | Paid $35,500 in architect fees for the building plans. | |
| 31 | Paid the local municipality $14,600 for building permits. | |
| Apr. 22 | Paid excavation costs for the new building of $16,600. | |
| Sept. 26 | The construction of the building was completed. The full cost was $726,000. Paid $131,000 cash and signed a mortgage payable for the balance. | |
| Sept. 30 | Purchased a one-year insurance policy for the building, $3,600. | |
| Oct. 20 | Paved the parking lots, driveways, and sidewalks for $39,000. | |
| Nov. 15 | Installed a fence for $10,600. |
(a)
Record the above transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
| Date | Account Titles and Explanation | Debit | Credit |
| Jan. 12Jan. 16Jan. 31Feb. 13Feb. 28Mar. 14Mar. 31Apr. 22Sept. 26Sept. 30Oct. 20Nov. 15 | |||
| (To record purchase of land in exchange for cash and a note payable.) | |||
| Jan. 12Jan. 16Jan. 31Feb. 13Feb. 28Mar. 14Mar. 31Apr. 22Sept. 26Sept. 30Oct. 20Nov. 15 | |||
| (Paid legal fees on purchase of land.) | |||
| Jan. 12Jan. 16Jan. 31Feb. 13Feb. 28Mar. 14Mar. 31Apr. 22Sept. 26Sept. 30Oct. 20Nov. 15 | |||
| (Paid to demolish building on land.) | |||
| Jan. 12Jan. 16Jan. 31Feb. 13Feb. 28Mar. 14Mar. 31Apr. 22Sept. 26Sept. 30Oct. 20Nov. 15 | |||
| (Received cash from material from demolished building on land.) | |||
| Jan. 12Jan. 16Jan. 31Feb. 13Feb. 28Mar. 14Mar. 31Apr. 22Sept. 26Sept. 30Oct. 20Nov. 15 | |||
| (Paid to grade and fill land.) | |||
| Jan. 12Jan. 16Jan. 31Feb. 13Feb. 28Mar. 14Mar. 31Apr. 22Sept. 26Sept. 30Oct. 20Nov. 15 | |||
| (Paid architect fees for building.) | |||
| Jan. 12Jan. 16Jan. 31Feb. 13Feb. 28Mar. 14Mar. 31Apr. 22Sept. 26Sept. 30Oct. 20Nov. 15 | |||
| (Paid for building permit for building.) | |||
| Jan. 12Jan. 16Jan. 31Feb. 13Feb. 28Mar. 14Mar. 31Apr. 22Sept. 26Sept. 30Oct. 20Nov. 15 | |||
| (Paid excavation costs for building.) | |||
| Jan. 12Jan. 16Jan. 31Feb. 13Feb. 28Mar. 14Mar. 31Apr. 22Sept. 26Sept. 30Oct. 20Nov. 15 | |||
| (Paid for construction of building.) | |||
| Jan. 12Jan. 16Jan. 31Feb. 13Feb. 28Mar. 14Mar. 31Apr. 22Sept. 26Sept. 30Oct. 20Nov. 15 | |||
| (Paid for insurance in advance.) | |||
| Jan. 12Jan. 16Jan. 31Feb. 13Feb. 28Mar. 14Mar. 31Apr. 22Sept. 26Sept. 30Oct. 20Nov. 15 | |||
| (Paid for paving of parking lots, driveways and sidewalks.) | |||
| Jan. 12Jan. 16Jan. 31Feb. 13Feb. 28Mar. 14Mar. 31Apr. 22Sept. 26Sept. 30Oct. 20Nov. 15 | |||
| (Paid for fence on property.) |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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
Introduction to Corporate Finance What Companies Do
Authors: John Graham, Scott Smart
3rd edition
978-1111222284
