Question

This is a 10 part question in accounting, Thanks!

McCoy's Fish House purchases a tract of land and an existing building for $980,000. The company plans to remove the old building and construct a new restaurant on the site. In addition to the purchase price, McCoy pays closing costs, including title Insurance of $2.800. The company also pays $13.600 In property taxes, which includes $8.800 of back taxes (unpald taxes from previous years) paid by McCoy on behalf of the seller and $4,800 due for the current fiscal year after the purchase date. Shortly after closing the company pays a contractor $49,000 to tear down the old building and remove it from the site. McCoy is able to sell salvaged materials from the old building for $4,600 and pays an additional $10.800 to level the land. Required: Determine the amount McCoy's Fish House should record as the cost of the land. (Amounts to be deducted should be indicated by a minus sign.) Total cost of the land

Answer 1

1	Cost of the land:
					$
	Purchase price				980000
	Title insurance				2800
	Property taxes-Back taxes				8800
	Cost of removing the building				49000
	Sale of salvaged materials				-4600
	Leveling cost of land				10800
	Total				1046800
2	Transaction	General Journal					Debit	Credit
	1	Equipment				(Note:1)	77520
		Prepaid insurance					640
		Cash		(940+640+1880)				3460
		Accounts payable		(69000+5700)				74700
		(To record expenditure for the new machine)
	Note:1	Cost of machinery:
					$
	Purchase price				69000
	Sales tax				5700
	Shipment of machine				940
	Installation				1880
	Total				77520
3
	1. Straight-line:
	Depreciation expense=(Cost-Salvage value)/Useful life=(28000-3000)/10=$ 2500
	2. Double-declining balance:
	Depreciation rate=2*(1/useful life)=2*(1/10)=2*0.10=0.20=20%
	Depreciation for the first year=Cost*Depreciation rate=28000*20%=$ 5600
	3. Activity-based:
	Depreciation expense per hour=(Cost-salvage value)/Expected hours over the life=(28000-3000)/10000=$ 2.5 per hour
	Depreciation for the first year=Depreciation expense per hour*Actual hours used=2.5*1680=$ 4200
4	Depreciation expense=(Cost-Salvage value)/Useful life=(15500-1500)/5=$ 2800
				2021	2022
	Depreciation expense			2800	2800
5	Depreciation expense=(Cost-Salvage value)/Useful life=(15900-2100)/6=$ 2300
				2021	2022
	Depreciation expense			2300	2300
6	Depreciation expense per miles=(Cost-salvage value)/Expected miles over the life=(16500-1500)/100000=$ 0.15 per hour
	Depreciation for 2021=Depreciation expense per miles*Actual miles=0.15*4000=$ 600
	Depreciation for 2022=Depreciation expense per miles*Actual miles=0.15*17000=$ 2550
				2021	2022
	Depreciation expense			600	2550
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