Question

Assume Coffee HouseCoffee House?, ?Inc., opened an office in Grove CityGrove City?, Ohio. Coffee HouseCoffee House incurred the following costs in acquiring? land, making land? improvements, and constructing and furnishing the new sales? building: Assume Coffee HouseCoffee House depreciates buildings over 3030 ?years, land improvements over 2525 ?years, and furniture over 1212 ?years, all on a? straight-line basis with zero residual value.Read the requirements Requirement 2. All construction was complete and the assets were placed in service on AprilApril 2. Record depreciation for the year ended December 31. Round to the nearest dollar. . Requirement 1. Show how to account for each of Coffee House'sCoffee House's costs by listing the cost under the correct account. Determine the total cost of each asset. a.	Purchase price of land, including an old building that will be used
	for a garage (land market value is $325,000; building market
	value is $75,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$360,000
b.	Grading (leveling) land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8,800
c.	Fence around the land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	31,900
d.	Attorney fee for title search on the land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	700
e.	Delinquent real estate taxes on the land to be paid by Coffee House . . . . . . .	5,200
f.	Company signs at entrance to the property . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,700
g.	Building permit for the sales building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	400
h.	Architect fee for the design of the sales building . . . . . . . . . . . . . . . . . . . . . . .	90,980
i.	Masonry, carpentry, and roofing of the sales building . . . . . . . . . . . . . . . . . . .	513,000
j.	Renovation of the garage building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	45,920
k.	Interest cost on construction loan for sales building . . . . . . . . . . . . . . . . . . . . .	9,500
l.	Landscaping (trees and shrubs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6,900
m.	Parking lot and concrete walks on the property . . . . . . . . . . . . . . . . . . . . . . . .	52,500
n.	Lights for the parking lot and walkways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7,800
o.	Salary of construction supervisor (84% to sales building; 10%
	to land improvements; and 6% to garage building renovations) . . . . . . . . . . .	43,000
p.	Office furniture for the sales building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	79,000
q.	Transportation and installation of furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,000

Answer 1

		Coffee house's cost	land	land improvements	Garage building	Sales Building	Furniture
	1	land value to be apportioned
		=325000/400000*360000	292500
		Building Value tobe apportioned
		=75000/400000*360000			67500
	2	Grading (leveling) Land	8800
	3	Fence around the land		31900
	4	Attorney fees for title search on the land	700
	5	Delinquent real estate taxes paid	5200
	6	Company signs at the entrance to the property		1700
	7	Building permit for sales building				400
	8	Architect fees for design of sales buidling				90980
	9	Masonry, carpentry & roofing of sales building				513000
	10	Renovation of garage building			45920
	11	Interest cost for construction loan for building				9500
	12	Landscaping(trees & shrubs)		6900
	13	Parking Lots and concrete walks on property		52500
	14	Lights of parking lots and walkways		7800
	15	Salary of construction supervisior		4300	2580	36120
	16	Office furniture for sales building					79000
	17	Transportation and installation of furniture					1000
		Total costs	307200	105100	116000	650000	80000
		Number of years	0	25	30	30	12
	Full year	Depreciation as per straight-line method		4204	3866.666667	21666.66667	6666.666667
Date	General journal		Debit	Credit
	Depreciation expense		36404
		Accumulated depreciation on land improvements		4204
		Accumulated depreciation on Garage Buidling		3866.67
		Accumulated depreciation on Sales Buidling		21666.67
		Accumulated depreciation on furniture		6666.67
	To record the depreciation expense for the year