Question #2

Diablo Enterprises, a newly formed business, incurred the following expenditures related to Land, Buildings, and Equipment:

Attorney fee for title search: $ 1,650

Architects fees: $44,830

Assessment by city for roads: $11,745

Cash paid for land and barn thereon: $602,000

Excavation and clearing land before construction of building: $20,640

Equipment purchased: $90,000

Freight on equipment purchased: $635

Hauling charges for delivery of equipment from storage to new building: $300

Installation of equipment: $2,200

Interest on long-term loans during construction:$37,925

New building constructed (building construction took 6 months from date of purchase of land and barn):$1,820,625

Removal of old barn: $6,280

Salvage sale of old redwood from barn: $1,310

Storage charges on equipment because delivery was made to early: $105

Trees, shrubs, and other landscaping after completion of building (these items are considered permanent in nature): $29,125

Required

1. Prepare a summary schedule listing the amounts that should be debited to Land, Land Improvements, Buildings, and Equipment. Assume the benefits of capitalizing interest during construction exceed the cost of implementation.

2. Indicate how any costs not debited to the aboveaccounts should be recorded.