Question

In: Accounting

Part 1: Acquiring Assets XYZ Corporation purchased the following assets during the year. Assist XYZ Corporation...

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:

  1. Land
  1. Building

  1. Equipment

           

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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

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