The following payments and receipts are related to land land

The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale apparel business. The receipts are identified by an asterisk. Fee paid to attorney for title search Cost of real estate acquired as a plant site: Land Cost of real estate acquired as a plant site: Building $3,600 720,000 60.000 23,400 15,000 75,000 10,000 3,400 18,000 8,400 a. b. C. Finder\'s fee paid to real estate agency d. Delinquent real estate taxes on property, assumed by purchaser e. Architect\'s and engineer\'s fees for plans and supervision f.Cost of removing building purchased with land in (b) g. Proceeds from sale of salvage materials from old building h. Cost of filling and grading land i. Premium on one-year insurance policy during construction j. Money borrowed to pay building contractor k. Special assessment paid to city for extension of water main to the property 800,000* 13,400 3,000 2,000 14.000 21,600 40,000 4,500* 800,000 1,400 Cost of repairing windstorm damage during construction m. Cost of repairing vandalism damage during construction n Cost of trees and shrubbery planted o. Cost of paving parking lot to be used by customers p. Interest incurred on building loan during construction q. Proceeds from insurance company for windstorm and vandalism damage r. Payment to building contractor for new building s. Refund of premium on insurance policy (i) canceled after 10 months

Solution

Answer:

Item

Land

land

Improvements

Building

other

Accounts

a.

3600

b.

780000

c.

23400

d.

15000

e.

75000

f.

10000

g.

(3400)*

h.

18000

i.

8400

j.

800,000

k.

13400

l.

3000

m.

2,000

n.

14000

o.

21600

p.

40,000

q.

(4,500)*

r.

800,000

s.                                       

(1400)*

* = recipt

Since land used as a plant site does not lose its ability to provide services, it is not depreciated. However, land improvements do lose their ability to provide services as time passes and are therefore depreciated.

Item	Land	land Improvements	Building	other Accounts
a.	3600
b.	780000
c.	23400
d.	15000
e.			75000
f.	10000
g.	(3400)*
h.	18000
i.			8400
j.				800,000
k.	13400
l.				3000
m.				2,000
n.	14000
o.		21600
p.			40,000
q.				(4,500)*
r.			800,000
s.			(1400)*