In: Accounting
Part 1: Acquiring Assets
XYZ Corporation purchased the following assets during the year. Assist XYZ Corporation by determining the cost of each asset.
Land Costs:
Purchase price $119,520
Surveying fees 3,550
Title insurance 1,270
Excavating fees necessary to pass safety inspection 10,250
Building Costs:
Purchase price $425,000
Title fees 7,270
Legal fees 520
Realty fees 14,560
Interest charges from the first year of the mortgage 12,400
Renovation and repair to make the building usable 11,600
Equipment Costs:
Purchase price $21,000
Installation costs 1,200
Shipping charges 500
Taxes 2,300
Maintenance and repair costs incurred in the first year 3,500
Calculate the acquisition cost that should be reported on the balance sheet for the:
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XYZ Corporation | ||||
Particulars | Amount $ | Land | Building | Equipment |
Purchase price of land | 119,520.00 | 119,520.00 | ||
Surveying fees of land | 3,550.00 | 3,550.00 | ||
Title insurance of land | 1,270.00 | 1,270.00 | ||
Excavating fees necessary to pass safety inspection | 10,250.00 | 10,250.00 | ||
Purchase price of building | 425,000.00 | 425,000.00 | ||
Title fees for the building | 7,270.00 | 7,270.00 | ||
Legal fees for the building | 520.00 | 520.00 | ||
Realty fees for the building | 14,560.00 | 14,560.00 | ||
Interest charges from the first year of the mortgage | 12,400.00 | 12,400.00 | ||
Renovation and repair to make the building usable | 11,600.00 | 11,600.00 | ||
Purchase price of equipment | 21,000.00 | 21,000.00 | ||
Installation costs on equipment | 1,200.00 | 1,200.00 | ||
Shipping charges on equipment | 500.00 | 500.00 | ||
Taxes on equipment | 2,300.00 | 2,300.00 | ||
Maintenance and repair costs incurred in the first year | ||||
Maintenance and repair costs will be treated as revenue expenditure and charged off to P/L. | ||||
Total | 630,940.00 | 124,340.00 | 481,600.00 | 25,000.00 |