Question

In: Accounting

Indicate whether each of the following expenditures should be classified as Building, Land improvements or None...

Indicate whether each of the following expenditures should be classified as Building, Land improvements or None of these *

Construction Material

Closing Cost

Fences

Purchase Price

Annual Property Taxes

Driveway

Solutions

Expert Solution

SOLUTION :

Construction Material - Building

It is a directly attributable cost to the building. It will be capitalized and depreciated.

Closing Stock - None of these

Closing stock relates to the goods that are to be sold in the normal course of business. They are current assets.

Fences - Land Improvement

Fences improves the usability of land. They can be added to the cost of land if fencing actually prepares the land for its intended use. But then, it can't be depreciated because land has a perpetual life. On the other hand, if the improvement has a useful life, SUCH IMPROVEMENT ALONE can be depreciated.

Purchase Price - Building

It is the amount paid to the vendor to secure the structure of the building. It is capitalized and depreciated.

Annual Property Taxes - None of these

Only the initial non recoverable taxes are are added to the cost of the property. Subsequent taxes like annual property taxes are of revenue nature and will be charged to income statement.

Driveway - Land Improvement

(Refer the explanation of fences)

NOTE : All are analyzed as per ASC 360 on Property, Plant & Equipment under the US GAAP.


Related Solutions

PART A Indicate whether each of the following items should be classified as an operating, investing,...
PART A Indicate whether each of the following items should be classified as an operating, investing, or financing activity on the statement of cash flows. If an item does not belong on the statement, indicate as "NA" (Not applicable). a. Declaration of dividends on common shares, to be paid later b. Payment of dividends on common shares c. Purchase of equipment d. Receipt of cash from the sale of a warehouse e. Receipt of cash through a long-term bank loan...
The following expenditures are related to land, land improvements, and buildings acquired for use in a...
The following expenditures are related to land, land improvements, and buildings acquired for use in a business enterprise. Determine how they should be classified (building/land or both and direct or indirect). Money borrowed to pay building contractors: Payment for construction from note proceeds: Cost of land fill and clearing: Delinquent real estate taxes on property assumed: Premium on 6-month insurance policy during construction Refund of 1-month insurance premium because construction completed early Architect’s fees on building Cost of real estate...
The following expenditures and receipt(s) are either related to land, land improvements, or buildings acquired for...
The following expenditures and receipt(s) are either related to land, land improvements, or buildings acquired for use in a business enterprise. Receipts are enclosed in parentheses. Identify each item below by writing either land, land improvements or buildings below the item: Interest paid during construction on money borrowed for construction                   13,000                                                                       Cost of parking lots and driveways                                                                           19,000                                     Cost of trees and shrubbery planted (permanent in nature)                                    14,000                                     Refund of 1-month insurance premium because construction completed      Early                                                                                                                 (1,000) Architect’s...
The following expenditures are related to land, land improvements and buildings, which were acquired on November...
The following expenditures are related to land, land improvements and buildings, which were acquired on November 1, 2015. Cost of real estate acquired for a new manufacturing plant S365,000 (the land is appraised for $262,800 and the building for $102,200) Real estate taxes paid by the purchaser......$20,000 Cost of removing a barn..... $8,500 Architect's fees for updating the building..... $6750 Attorneys fees for closing the sale..... $12500 Grading land.... $3500 paving parking lot......$7000 Planting trees and shrubs.......$9250 Cost of repairs...
For each of the following statements, indicate whether it is true of all, some, or none...
For each of the following statements, indicate whether it is true of all, some, or none of the various kinds of peroxisomes. Please first answer the question, then provide an explanation. I would appreciate it if you could type the answer and handwriting is often difficult to read. 5. Contains peroxide-generating chemical reactions. a. It is true of all, because it is general property of peroxisomes. b. It is true of glyoxysomes and some animal peroxisomes, because only they contain...
1. For each of the following items, indicate whether it would be classified as an (O)...
1. For each of the following items, indicate whether it would be classified as an (O) operating activity, an     (I) investing activity, a (F) financing activity, or a significant (N) noncash investing or financing activity. __________Received cash dividends from an investment in the stock of another corporation. __________Collected accounts receivable from customers. __________Issued bonds payable for cash. __________Paid wages to employees. __________Issued stock for cash. __________Sold equipment for cash. __________Purchased land in exchange for a note payable. __________Paid cash...
For each of the following items, indicate whether it would be classified as an (O) operating...
For each of the following items, indicate whether it would be classified as an (O) operating activity, an (I) investing activity, a (F) financing activity, or a significant (N) noncash investing or financing activity. __________Received cash dividends from an investment in the stock of another corporation. __________Received interest from an investment in the bonds of another corporation. __________Purchase of land for cash. __________Purchased a building in exchange for common stock. __________Purchased treasury stock. __________Paid interest on a note payable. __________Collected...
Indicate whether each of the items above should be classified under IFRS on December 31, 2017...
Indicate whether each of the items above should be classified under IFRS on December 31, 2017 as a current or long-term liability or under some other classification. Consider each item independently from all others; that is, do not assume that all of them relate to one particular business. If the classification of some of the items is doubtful, explain why in each case. 1) A bank loans payable of a winery, due March 10, 2021 (wine requires aging for five...
Indicate whether each of the following costs of a cabinet manufacturer would be classified as direct...
Indicate whether each of the following costs of a cabinet manufacturer would be classified as direct materials cost, direct labor cost, factory overhead cost, or period cost. Plant manager’s salary _______________________________ Office administrative assistant’s salary _____________________________ Depreciation on factory equipment ________________________________ Rent on office building _______________________________ Varieties of wood ______________________________ Varnish for costing cabinets _______________________________ Utilities cost on the factory _______________________________ Cabinet assembly worker’s salary ________________________________ Advertising costs ________________________________ Screws and glue used in assembly process ____________________________
Exercise 10-1 The expenditures and receipts below are related to land, land improvements, and buildings acquired...
Exercise 10-1 The expenditures and receipts below are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are enclosed in parentheses. (a) Money borrowed to pay building contractor (signed a note) $(276,500 ) (b) Payment for construction from note proceeds 276,500 (c) Cost of land fill and clearing 11,220 (d) Delinquent real estate taxes on property assumed by purchaser 8,340 (e) Premium on 6-month insurance policy during construction 12,060 (f) Refund of 1-month...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT