Question
Spitfire Company was incorporated on January 2, 2015, but was unable to begin manufacturing activities until July 1, 2015, because new factory facilities were not
Spitfire Company was incorporated on January 2, 2015, but was unable to begin manufacturing activities until July 1, 2015, because new factory facilities were not completed until that date. The Land and Buildings account reported the following items during 2015. January 31 Land and buildings $160,000 February 28 Cost of removal of building 9,800 May 1 Partial payment of new construction 60,000 May 1 Legal fees paid 3,770 June 1 Second payment on new construction 40,000 June 1 Insurance premium 2,280 June 1 Special tax assessment 4,000 June 30 General expenses 36,300 July 1 Final payment on new construction 30,000 December 31 Asset write-up 53,800 399,950 December 31 Depreciation2015 at 1% (4,000) December 31, 2015 Account balance $395,950
Legal fees covered the following. Cost of organization $610 Examination of title covering purchase of land 1,300 Legal work in connection with construction contract 1,860 $3,770
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