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In: Accounting

Indicate for each transaction below the account(s) and amount(s) that should be debited and credited. Use...

Indicate for each transaction below the account(s) and amount(s) that should be debited and credited. Use abbreviated account titles.

Item Accounts Amounts
(a) Jan. 1, 2001 purchased land with a usable office building thereon for cash of $200,000. Tax assessment values: Land $20,000; building $60,000
(b) Jan. 1, 2001 purchased land for future building site for a cash cost of $40,000; an old building on this site, appraised at $2,000 at the date of purchase, is to be torn down immediately.
(c) Net cash cost of demolishing the old building in (b) above amounted to $2,000.
(d) Cash cost of excavation for basement of the new building (b above) was $6,000.
(e) Lawyers' fees paid in connection with purchase of real estate in (b) $900.
(f) Taxes paid on land purchased in (b) assessed before completion of building, $300.
(g) Factory superintendent's salary for 2001 was $24,000. During 2001, the superintendent spent the first six months supervising construction of the new building; the next three months supervising installation of productive machinery in the new building, and the last three months supervising operations in the new building.
(h) Cost of grading and paying parking space and walks behind new building, $9,500.

Solutions

Expert Solution

Item Accounts Amounts Comments
(a) Jan. 1, 2001 purchased land with a usable office building thereon for cash of $200,000. Tax assessment values: Land $20,000; building $60,000 Land & building A/c (Debit) $           2,80,000
Cash A/c (credit) $           2,80,000
(b) Jan. 1, 2001 purchased land for future building site for a cash cost of $40,000; an old building on this site, appraised at $2,000 at the date of purchase, is to be torn down immediately. Land & building A/c (Debit) $              49,200 All the cost incurred in relation to the purchase of this land are to be included in the value of land and Building account.
(c) Net cash cost of demolishing the old building in (b) above amounted to $2,000.
(d) Cash cost of excavation for basement of the new building (b above) was $6,000. Cash A/c (credit) $              49,200
(e) Lawyers' fees paid in connection with purchase of real estate in (b) $900.
(f) Taxes paid on land purchased in (b) assessed before completion of building, $300.
(g) Factory superintendent's salary for 2001 was $24,000. During 2001, the superintendent spent the first six months supervising construction of the new building; the next three months supervising installation of productive machinery in the new building, and the last three months supervising operations in the new building. Salary A/c (Debit) $              24,000
Cash A/c (credit) $              24,000
(h) Cost of grading and paying parking space and walks behind new building, $9,500. Parking charges A/c (Debit) $                9,500
Cash A/c (credit) $                9,500

ekkarill92 answered 8 months ago
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