Question

At December 31, 2016, certain accounts included in the property, plant, and equipment section of Bridgeport Company's balance sheet had the following balances. Land $237,700 Buildings 905,300 Leasehold improvements 665,200 Equipment 882,900 During 2017, the following transactions occurred. 1. Land site number 621 was acquired for $853,100. In addition, to acquire the land Bridgeport paid a $55,700 commission to incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $15,500. real estate agent. Costs of $42,200 were 2. second tract of land (site number 622) with a building was acquired for $418,900. The closing statement indicated that the land value was $298,400 and the building value was $120,500. Shortly after acquisition, the building was demolished at a cost of $40,600. A new building was constructed for $329,400 plus the following costs. Excavation fees $37,700 Architectural design fees 10,900 Building permit fee 2,400 Imputed interest on funds used during construction (stock financing) 8,500 The building was completed and occupied on September 30, 2017. 3. third tract of land (site number 623) was acquired for $647,600 and was put on the market for resale. 4. During December 2017, costs of $89,500 were incurred to improve leased office space. The related lease will terminate on December 31, 2019, and is not expected to be renewed. (Hint: Leasehold improvements should be handled in the same manner as land improvements.) group of new machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machines was $86,900, freight costs were $3,300, installation costs were $2,400, and royalty payments for 2017 were $17,700. 5. (a) Calculate the balance at December 31, 2017 in each of the following balance sheet accounts. Disregard the related accumulated depreciation accounts. Balance at December 31, 2017 Land Buildings Leasehold Improvements Equipment

Answer 1

Balance as at 31,2017 in $ Land $1,632,700 Buildings Leasehold improvements Equipment 1,285,700 754,700 975,500

Solution:

Bridgeport company Analysis of Land account In Dollars($) for 2017 Balance at january 1,2017 237,700 Land site number 621 Acquisition cost Commission to real estate agent Clearing charges Less:Amounts received 853,100 55,700 42,200 -15,500 935,500 Total land site number 621 935,500 Land site number 622 Land value Building value Demolition cost 298,400 120,500 40,600 Total land site number 622 459,500 459,500 Balance as at December31, 2017 1,632,700

Bridgeport company Analysis of Building account for 2017 In Dollars($) Balance at January 1,2017 Cost of new building constructed on land site number 622 Construction costs 905,300 329,400 Excavation fees 37,700 Architectural design fees Building permit fee Balance as at December 31,2017 10,900 2,400 380,400 1,285,700

Bridgeport company In Dollars($) Analysis of Leasehold for 2017 Balance at January 1,2017 665,200 Office space 89,500 Balance as at December 31,2017 754,700

Bridgeport company In Dollars($) Analysis of Machinery and equipment account for 2017 Balance at january 1,2017 Cost of new machines acquired Invoice price Freight costs Installation costs 882,900 86,900 3,300 92,600 2,400 Balance at December 31, 2017 975,500