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.

Item Description Amount

a$.$ Fee paid to attorney for title search $$2,000$

b$.$ Cost of real estate acquired as a plant site: Land $290,000$

b$.$ Cost of real estate acquired as a plant site: Building $($to be demolished$)55,000$

c$.$ Delinquent real estate taxes on property, assumed by purchaser $15,500$

d$.$ Cost of razing and removing building acquired in $($b$)6,000$

e$.$ Proceeds from sale of salvage materials from old building $4,000*$

f$.$ Special assessment paid to city for extension of water main to the property $29,000$

g$.$ Architect$$s and engineer$$s fees for plans and supervision $50,000$

h$.$ Premium on $1-$year insurance policy during construction $6,000$

i$.$ Cost of filling and grading land $11,000$

j$.$ Money borrowed to pay building contractor $900,000*$

k$.$ Cost of repairing windstorm damage during construction $5,500$

l$.$ Cost of paving parking lot to be used by customers $31,000$

m$.$ Cost of trees and shrubbery planted $12,000$

n$.$ Cost of floodlights installed on parking lot $2,000$

o$.$ Cost of repairing vandalism damage during construction $2,500$

p$.$ Proceeds from insurance company for windstorm and vandalism damage $7,000*$

q$.$ Payment to building contractor for new building $800,000$

r$.$ Interest incurred on building loan during construction $35,000$

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

a$.$

$fill in the blank $2$

b$.$

$fill in the blank $4$

c$.$

$fill in the blank $6$

d$.$

$fill in the blank $8$

e$.$

$fill in the blank $10$

f$.$

$fill in the blank $12$

g$.$

$fill in the blank $14$

h$.$

$fill in the blank $16$

i$.$

$fill in the blank $18$

j$.$

$fill in the blank $20$

k$.$

$fill in the blank $22$

l$.$

$fill in the blank $24$

m$.$

$fill in the blank $26$

n$.$

$fill in the blank $28$

o$.$

$fill in the blank $30$

p$.$

$fill in the blank $32$

q$.$

$fill in the blank $34$

r$.$

$fill in the blank $36$

s$.$

$fill in the blank $38$

$2.$ 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 fill in the blank $1$ of $4$

lose its ability to provide services; thus, it fill in the blank $2$ of $4$

depreciated. However, land improvements fill in the blank $3$ of $4$

lose their ability to provide services as time passes and are, therefore, fill in the blank $4$ of $4$

$.$

$4.$ What would be the effect on the income statement and balance sheet if the cost of filling and grading land of $$11,000[$payment $($i$)]$ was incorrectly classified as Land Improvements rather than Land? Assume Land Improvements are depreciated over a $20-$year life using the double$-$declining$-$ balance method.