Question
Mawn Company bought land and built a warehouse during 2019. It improperly debited the following related costs to an account titled Land and Buildings: Land
Mawn Company bought land and built a warehouse during 2019. It improperly debited the following related costs to an account titled Land and Buildings:
Land purchase $22,000
Demolition of old building 3,000
Legal fees for land acquisition 1,500
Avoidable interest on loan for construction 2,900
Building construction 53,000
Assessment by city for sewer connectioncity is responsible for maintenance 1,200
Landscaping (expected to be permanent in nature) 3,500
Equipment purchased for excavation 18,800
Pro rata portion of fixed overhead incurred during construction of building 15,000
Insurance on building during construction 1,000
Profit on construction 12,000
Compensation for injury to construction worker (not covered by the insurance policy purchased by Mawn) 3,000
Modifications to building ordered by building inspectors (due to poor planning by Mawn) 7,500
Delinquent property taxes on land paid in 2019 (land was purchased during the year) 2,500
Required: Prepare the correcting entries on December 31, 2019, to properly reclassify the preceding items.
Please make sure to include the dates and not that this question was answered but I believe that some numbers were incorrect and it was not answered properly nor effectively
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