The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk. a. Fee paid to attorney for title search $3,000 Cost of real estate acquired as a plant site: 290,000 b. Land C. e. 9. Building (to be 50,000 demolished) Delinquent real estate taxes on property, 16,000 assumed by purchaser Cost of razing and removing building d. acquired in (b) 5,000 Proceeds from sale of salvage materials 3,000 from old building Special assessment paid to city for f. 29,000 extension of water main to the property Architect's and engineer's fees for plans and 70,000 supervision Premium on one-year insurance policy 6,000 during construction i. Cost of filling and grading land 12,000 1. Money borrowed to pay building contractor 900,000 Cost of repairing windstorm damage during 5,500 construction Cost of paving parking lot to be used by 1. 33,000 customers m. Cost of trees and shrubbery planted 12,000 n. Cost of floodlights installed on parking lot 2,000 Cost of repairing vandalism damage during 2,500 construction h. k. 0. p. Proceeds from insurance company for windstorm and vandalism damage 7,500 * 9. Payment to building contractor for new building 900,000 r. Interest incurred on building loan during construction 34,000 S. Refund of premium on insurance policy (h) canceled after 11 months 500 Required: 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from the dropdown list for each letter and enter the appropriate amount. Enter receipts as negative amounts using the minus sign. Item Account Amount $fill in the blank 2 a. $fill in the blank 4 b. $fill in the blank 6 C. $fill in the blank 8 d. $fill in the blank 10 e. $fill in the blank 12 f. $fill in the blank 14 9 $fill in the blank 16 h. $fill in the blank 18 i. $fill in the blank 20 1. $fill in the blank 22 k. $fill in the blank 24 1. $fill in the blank 26 m. $fill in the blank 28 n. $fill in the blank 30 o. $fill in the blank 32 p. $fill in the blank 34 q. $fill in the blank 36 r. $fill in the blank 38 s. 2. Determine the amount debited to Land, Land Improvements, and Building. Land Land Improvements Building $fill in the blank 39 $fill in the blank 40 $fill in the blank 41 3. Land used as a plant site lose its ability to provide services; thus, it depreciated. However, land improvements lose their ability to provide services as time passes and are, therefore, 4. What would be the effect on the income statement and balance sheet if the cost of filling and grading land of $12,000 [payment (i)] was incorrectly classified as Land Improvements rather than Land? Assume Land Improvements are depreciated over a 20-year life using the doubledeclining- balance method. Question 1 choices (a-s) Land Land improvements Building other accounts Pick 1 for each. Question 3 choices ( parts) does not depreciated (Pick 1 for does not is not do not depreciated the sentence) do Question 4 choices (1 port) Depreciation expense would be overstated, land under stated, net income understated Depreciation expense overstated, and overstated, net income over stated
