Question

Allocating Payments and Receipts to Fixed Asset Accounts The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk. Fee paid to attorney for title search $3,700 Cost of real estate acquired as a plant site: Land 390,000 Building (to be demolished) 37,100 Delinquent real estate taxes on property, assumed by purchaser 21,900 Cost of tearing down and removing building acquired in (b) 6,100 Proceeds from sale of salvage materials from old building 3,700* Special assessment paid to city for extension of water main to the property 14,600 Architect's and engineer's fees for pruns and supervision 53,600 Premium on one-year Insurance policy during construction 5,200 Cost of filing and grading land 21,500 Money borrowed to pay building contractor 914,600* Cost of repairing windstorm damage during construction 6,700 Cost of paving parking lot to be used by customers 18,500 m. Cost of trees and shrubbery planted 11,000 n. Cost of floodlights installed on parking lot 1,300 0. Cost of repairing vandalism damage during construction 3,000 . Proceeds from insurance company for windstorm and vandalism damage 7,300

Answer 1

Solution - Allocating payments and receipts to fixed Asset Accounts The receipts are identified Tlem Account by on asteri Amount fee paid to attomey $ 3,700 cost of real estate Cland + building] (390,000 + 37,100] | 427,100 real estate taxes on property 21.900 Tearning down & removing building acarrived 1 in (6) 6,100 Sales of Satvage maleria is from old -3,700 building th, 600 land 53,600 Buildings 5.200 insurance policy doring Construction Cost of fening & grading land .. a1,500 Other accounts -914,600

( 6,700 18,500 11,000 1,300 Reparing windstorm damage during Constiuction Land improvements Cost of trees and shrubbery plan tod Land improvements Reparing vandalism damage during Construction Other accounts : 3,000 -7,300 975;100 Buidings interest incorred on building loan 45,800 -433 Buildings