Question

In: Accounting

Swifty Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings,...

Swifty 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 $936 Architect’s fees 5,706 Cash paid for land and dilapidated building thereon 156,600 Removal of old building $36,000 Less: Salvage 9,900 26,100 Interest on short-term loans during construction 13,320 Excavation before construction for basement 34,200 Machinery purchased (subject to 2% cash discount, which was not taken) 99,000 Freight on machinery purchased 2,412 Storage charges on machinery, necessitated by noncompletion of building when machinery was delivered 3,924 New building constructed (building construction took 6 months from date of purchase of land and old building) 873,000 Assessment by city for drainage project 2,880 Hauling charges for delivery of machinery from storage to new building 1,116 Installation of machinery 3,600 Trees, shrubs, and other landscaping after completion of building (permanent in nature) 9,720 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 company’s fee for title search $ $ $ $ Architect’s fees Cash paid for land and old building Removal of old building Interest on short-term loans during construction Excavation before construction for basement Machinery purchased Freight on machinery purchased Storage charges on machinery New building constructed Assessment by city for drainage project Hauling charges Installation of machinery Trees, shrubs, and other landscaping $ $ $ $

Solutions

Expert Solution

To Land To building To Mach
Title search            936.00 Architects fees        5,706.00 Machinery Cost      99,000.00
Cost of old building    156,600.00 Evacuation basement      34,200.00 Freight        2,412.00
Cost of removal of old building      36,000.00 Assessment of drainage        2,880.00 Storage charges        3,924.00
Salvage value       -9,900.00 Cost of new building    873,000.00 hauling of machinery        1,116.00
trees etc        9,720.00 installation of machinery        3,600.00
Total Cost    183,636.00 Total Cost    925,506.00 Total Cost    110,052.00
Interest        2,006.27 Interest      10,111.38 Interest        1,202.35
Cost to capitalise    185,642.27 Cost to capitalise    935,617.38 Cost to capitalise    111,254.35

Related Solutions

Windsor Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings,...
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...
Oriole Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings,...
Oriole 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 $936 Architect’s fees 5,706 Cash paid for land and dilapidated building thereon 156,600 Removal of old building $36,000    Less: Salvage 9,900 26,100 Interest on short-term loans during construction 13,320 Excavation before construction for basement 34,200 Machinery purchased (subject to 2% cash discount, which was not taken) 99,000 Freight on machinery purchased 2,412 Storage...
Riverbed Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings,...
Riverbed 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 $858 Architect’s fees 5,231 Cash paid for land and dilapidated building thereon 143,550 Removal of old building $33,000    Less: Salvage 9,075 23,925 Interest on short-term loans during construction 12,210 Excavation before construction for basement 31,350 Machinery purchased (subject to 2% cash discount, which was not taken) 90,750 Freight on machinery purchased 2,211 Storage...
Exercise 10-5 Ben Sisko Supply Company, a newly formed corporation, incurred the following expenditures related to...
Exercise 10-5 Ben Sisko 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 $1,186 Architect’s fees 7,228 Cash paid for land and dilapidated building thereon 198,360 Removal of old building $45,600    Less: Salvage 12,540 33,060 Interest on short-term loans during construction 16,872 Excavation before construction for basement 43,320 Machinery purchased (subject to 2% cash discount, which was not taken). Company uses net method...
Exercise 10-5 Ben Sisko Supply Company, a newly formed corporation, incurred the following expenditures related to...
Exercise 10-5 Ben Sisko 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                                                                                  $520 Architect’s fees                                                                                                                                3,170 Cash paid for land and dilapidated building thereon                                                         87,000 Removal of old building                                                                                 $20,000    Less: Salvage                                                                                                   5,500                     14,500 Interest on short-term loans during construction                                                              7,400 Excavation before construction for basement                                                                    19,000 Machinery purchased (subject to 2% cash discount, which was not taken)           ...
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...
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...
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