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Allocate Payments and Receipts to Food Asset Accounts The following payments and receipts are related to land, and improvemen

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Answer #1

Part 1)

The completed table is provided as below:

Item Amount Account
a. 39,300 Building
b. 15,700 Land
c. 4,500 Land
d. 13,600 Land Improvements
e. 313,200 Land
f. 4,900 Other Accounts
g. 2,200 Other Accounts
h. 8,100 Land Improvements
i. 10,700 Land
j. 2,700 Land
k. 900 Land
l. 33,600 Building
m. -670,800 Other Accounts
n. 715,100 Building
o. -5,400 Other Accounts
p. 3,800 Building
q. -2,700 Land
r. -360 Building
s. 16,100 Land

_____

Part 2)

The value of increases to land, land improvements and building is determined as follows:

Land = 15,700 + 4,500 + 313,200 + 10,700 + 2,700 + 900 - 2,700 + 16,100 = $361,100

Land Improvements = 13,600 + 8,100 = $21,700

Buildings = 39,300 + 33,600 + 715,100 + 3,800 - 360 = $791,440

____

Tabular Representation:

Land Land Improvements Buildings
$361,100 $21,700 $791,440

_____

Part 3)

The cost of paving the parking lot used by customers of the business. (which is Option B)

____

Explanation:

Assets with limited useful life can be depreciated. Land cannot be depreciated as it has unlimited useful life, that is, it will continue to provide services for an indefinite period of time. Therefore, the cost of land [which includes Option A (filing and grading the land acquired as a plant site), Option C (special assessment paid to the city for an extension of the water main to the plant site) and Option D (delinquent real estates taxes on the land)] will not be depreciated. Land improvements, on the other hand, have limited useful life and can therefore, be depreciated. Therefore, Option B (which is the cost of paving the parking lot used by customers of the business) is the current answer.

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