Question 9 marks On December 31, 2018 Change Co. showed the following account balances in his general ledger: Land $330,000 990,000 975,000 Building and plant facilities Machinery and equipment During 2019, the following transactions occurred 1. Land site A was acquired for $650,000 plus legal fees on closing of $40,000. 2. Land site B, with a building, was acquired for $720,000. The closing statement indicated that the land value was $500,000 and the building value was $300,000. Shortly after acquisition, the building was removed and sold to a third party for $50,000. A new building was constructed for $460,000, plus the following costs: $45,000 58,000 25,000 Architectural design fees Excavation fees Imputed interest on company funds The imputed interest represents the amount of interest that the company would have paid if it had borrowed money to construct the building. The building was completed and occupied at the end of November 2019 3. A group of machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machine was $147,000, freight costs were $4,000, and royalty payments for 2019 were $12,000. Required a. Prepare a schedule to determine the balance in each of the following balance sheet accounts at December 31, 2019 Land [3.5 marks] [2.5 marks Building and plant facilities [2 marks Machinery and equipment Disregard the related accumulate depreciation amounts. b. List the item(s) in the problem that were not included in the accounts listed in part (a). Indicate where, or if, these items should be included in the company's 2019 financial statements [ mark] Question 9 marks On December 31, 2018 Change Co. showed the following account balances in his general ledger: Land $330,000 990,000 975,000 Building and plant facilities Machinery and equipment During 2019, the following transactions occurred 1. Land site A was acquired for $650,000 plus legal fees on closing of $40,000. 2. Land site B, with a building, was acquired for $720,000. The closing statement indicated that the land value was $500,000 and the building value was $300,000. Shortly after acquisition, the building was removed and sold to a third party for $50,000. A new building was constructed for $460,000, plus the following costs: $45,000 58,000 25,000 Architectural design fees Excavation fees Imputed interest on company funds The imputed interest represents the amount of interest that the company would have paid if it had borrowed money to construct the building. The building was completed and occupied at the end of November 2019 3. A group of machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machine was $147,000, freight costs were $4,000, and royalty payments for 2019 were $12,000. Required a. Prepare a schedule to determine the balance in each of the following balance sheet accounts at December 31, 2019 Land [3.5 marks] [2.5 marks Building and plant facilities [2 marks Machinery and equipment Disregard the related accumulate depreciation amounts. b. List the item(s) in the problem that were not included in the accounts listed in part (a). Indicate where, or if, these items should be included in the company's 2019 financial statements [ mark]
