Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Money Store, Inc., opened an office in Maple Grove, Minnesota, Money Store incurred the following costs in acquiring land, making land improvements, and constructing and

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Money Store, Inc., opened an office in Maple Grove, Minnesota, Money Store incurred the following costs in acquiring land, making land improvements, and constructing and furnishing the new sales building: Click the icon to view the financial data.) The company depreciates buildings over 30 years, land improvements over 15 years, and furniture over 12 years, all on a straight-line basis with residual values of zero. Read the requirements. a. Purchase price of land, including an old building that will be used for a garage (land market value is $315,000; building market value is $85,000) b. Grading (leveling) land Fence around the land $ 360,000 8,700 0. 31,200 500 e e. 5,200 1,400 d. Attorney fee for title search on the land Delinquent real estate taxes on the land to be paid by Money Store f. Company signs at entrance to the property g. Building permit for the sales building h. Architect fee for the design of the sales building i. Masonry, carpentry, and roofing of the sales building 600 92,750 512,000 37,450 9.800 6,000 j. Renovation of the garage building k. Interest cost on construction loan for sales building I Landscaping (trees and shrubs) m. Parking lot and concrete walks on the property Lights for the parking lot and walkways Salary of construction supervisor (85% to sales building: 10% 52,500 n. 7,300 0 52,500 7,300 n. m. Parking lot and concrete walks on the property Lights for the parking lot and walkways Salary of construction supervisor (85% to sales building; 10% to land improvements, and 5% to garage building renovations) p. Office furniture for the sales building o 41,000 w 79,700 q: Transportation and installation of furniture 1,500 1. Identify the proper account (Land, Land Improvements, Sales Building, Garage Building, or Furniture) for each of the costs listed in the problem. Calculate the total cost of each asset. 2. All construction was complete and the assets were placed in service on April 2. Record depreciation for the year ended December 31. Round to the nearest dollar. 3. Why would a manager need to understand the concepts covered in this problem? Requirement 3. wny would a manager need to understand the concepts covered in this problemy This problem shows how to determine the cost of a asset. It also demonstrates the computation of for a variety of those assets, which affects Because virtually all businesses use these assets, a manager needs to understand how those assets' costs and computations are determined. Managers need to understand the meaning, components, and computation of because often their performance is measured by this amount

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting An International Introduction

Authors: David Alexander

2nd Edition

9780273685203

More Books

Students explore these related Accounting questions