Question

Windsor Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment.

Abstract company’s fee for title search				$780
Architect’s fees				4,755
Cash paid for land and dilapidated building thereon				130,500
Removal of old building		$30,000
Less: Salvage		8,250		21,750
Interest on short-term loans during construction				11,100
Excavation before construction for basement				28,500
Machinery purchased (subject to 2% cash discount, which was not taken)				82,500
Freight on machinery purchased				2,010
Storage charges on machinery, necessitated by noncompletion of
building when machinery was delivered				3,270
New building constructed (building construction took 6 months from
date of purchase of land and old building)				727,500
Assessment by city for drainage project				2,400
Hauling charges for delivery of machinery from storage to new building				930
Installation of machinery				3,000
Trees, shrubs, and other landscaping after completion of building
(permanent in nature)				8,100

Determine the amounts that should be debited to Land, to Buildings, and to Machinery and Equipment. Assume the benefits of capitalizing interest during construction exceed the cost of implementation. Company uses net method to record discount. (Please leave spaces blank if there is no answer. Do not enter zeros in those spaces.)

		Land		Buildings		Machinery and Equipment		Other
Abstract fees		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
Architect’s fees		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Cash paid for land and old building		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Removal of old building		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Interest on loans during construction		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Excavation before construction		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Machinery purchased		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Freight on machinery		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Storage charges caused by noncompletion of building		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
New building		enter a dollar amount		enter a dollar amount		enter a dollar amount

Answer 1

Machinery is purchased at cash discount has been reported after discount cost (82500 * 0.98)

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