Problem One:

Problem 9-1B on page 469, ignoring GST. Assume the fencing in #8 is permanent. In addition to the textbook instructions, answer the following:

1) How would your answer change for #8 if the fencing were erected prior to the demolition mentioned in #9, and were removed after the building was constructed? Assume that the $6,000 is material but that the removal costs were insignificant.

2) Suppose that Foxx Ltd. borrowed enough money not only to make the purchase but also to fund all of the other expenditures mentioned in the problem. Interest was incurred from the date of borrowing, which was two months before construction expenditures commenced, until six months after construction of the building was completed. Discuss the proper accounting treatment for the interest charges, i.e., are they all expensed, all capitalized, or some expensed and some capitalized? Provide reasons for your conclusion.

Item

Land

Buildings

Other Accounts

PROBLEMS: SET B P9-1B Foxx Ltd. was organized on January 1, During the first year of operations, the following plant asset expenditures and receipts were recorded in random order. Debit 1. Accrued real estate taxes paid at time of purchase of real estate 2. Real estate taxes on land paid for the current vear 3. Full payment to building contractor 4. Excavation costs for new building 5. Cost of real estate purchased as a plant site (land 75,000 and 9,000 6,100 520,000 19,000 building 25,000) 6. Cost of parking lots and driveway:s 7. Architect's fees on building plans 8. Installation cost of fences around property 9. Cost of demolishing building to make land suitable for construction 100,000 18,000 9,000 6,000 19,000 706,100 of new buildin Credit 10. Proceeds from salvage of demolished building Instructions Analyze the foregoing transactions using the following column headings. Insert the num ber of each transaction in the Item column, and then insert the amounts in the other appropriate columns. For amounts entered in the Other Accounts column, also indicate the account title. 4,200 Item Land Buildings Other Accounts P9-2B In recent years, Wng Company purchased three machines. Because of heavy turn over in the accounting department, a different accountant was in charge of selecting the