The Weber Company purchased a mining site for $612,373 on July 1. The company expects to minore for the next 10 years and anticipates that a total of 81,069 tons will be recovered. During the first year the company extracted 5,670 tons of ore. The depletion expenses Oa. $56,161.30 Ob. $39,279.45 Oc. $42,808.50 Od. $50,760.00 Allocating payments and receipts to fixed asset accounts The following payments and receipts are related to land, and improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk a. Fee paid to attomey for title search $3,000 b. Cost of real estate acquired as a plant site: Land 285,000 Building (to be demolished) 50,000 c. Delinquent real estate taxes on property, assumed by purchaser 15,000 d. Cost of razing and removing building acquired in (b) 6,000 e. Proceeds from sale of salvage materials from old building 4,000 1. Special assessment paid to city for extension of water main to the property 29,000 9. Architect's and engineer's fees for plans and supervision 70,000 h. Premium on one-year Insurance policy during construction 5,000 Cost of filling and grading land 12,000 J Money borrowed to pay building contractor 800,000 k. Cost of repairing windstorm damage during construction 6,000 Cost of paving parking lot to be used by customers 32,000 m. Cost of trees and shrubbery planted 10,000 n. Cost of floodlights installed on parking lot 3,000 0. Cost of repairing vandalism damage during construction 2,000 D. Proceeds from Insurance company for windstorm and vandalism damage 7,500 4. Payment to building contractor for new building 800,000 1. Interest incurred on building loan during construction 35,000 S. Refund of premium on Insurance policy (h) canceled after 11 months 500 - 5. 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 2. Determine the amount debited to Land, Land Improvements, and Building Land Land Improvements Building depreciated. However, land improvements 3. Land used as a plant site lose its ability to provide services; thus, it 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 filing and grading land of $12,000 (payment (0) was incorrectly classified as Land Improvements rather than Land? Assume Land Improvements are depreciated over a 20-year life using the doubledeclining- balance method
