On February 1, 20X0, Larkin Corporation purchased a parcel of land as a factory site for P400,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 20X0. Costs incurred during this period are listed as follows: Demolition of the old building - P 25,000; Architect's fees - 35,000; Legal fees for title investigation and purchase contract - 5,000; Construction costs - 890,000; (Salvaged materials resulting from demolition were sold for P10,000.) Larkin should record the cost of the new building as

On February 1, 20X0, Larkin Corporation purchased a parcel of land as a factory site for P400,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 20X0. Costs incurred during this period are listed as follows: Demolition of the old building - P 25,000; Architect's fees - 35,000; Legal fees for title investigation and purchase contract - 5,000; Construction costs - 890,000; (Salvaged materials resulting from demolition were sold for P10,000.) Larkin should record the cost of the new building as

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 46P

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During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated seven machines for $250,000 to improve efficiency in production of their remaining useful life of eight years Low-cost repairs throughout the year totaled $79,000 Replaced a broken gear on a machine for $6,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?
el Salalak Company incurred the following plant asset expenditures and receipts in its first year of operations. The purchase price of the land was RO 285,000. The cost of filling the land was RO 15,000. Cost of demolishing an old building on the land to make land suitable for construction of new factory RO 10,000. Proceeds from salvage of the materials from the old building totalled RO 4,000. Full payment to factory construction contractor RO 300,000. Real estate taxes on land paid at time of purchase RO 4,500. Architect's fees on factory design plans RO8,500. Cost of the fences, parking lots and driveways RO 30,000. What is the total cost of the factory building? Moh O a. RO 314,000 12 O b. None of the options are correct Oc RO 310,500 O d. RO 308,500 10 O e. RO 306,000
The Italian Bread Company purchased land as a factory site for $70,000. An old building on the property was demolished, and construction began on a new building. Costs incurred during the first year are listed as follows:Demolition of old building $ 9,000Sale of salvaged materials (1,100)Architect fees (for new building) 20,000Legal fees (for title investigation of land) 3,000Property taxes on the land (for the first year) 4,000Building construction costs 600,000Interest costs related to the construction 23,000Required:Determine the amounts that the company should record in the Land and the Building accounts.
On January 6, Year 1, Mount Jackson Corporation purchased a tract of land for a factory site for $825,000. An existing building on the site was demolished and the new factory was completed on October 11, Year 1. Additional cost data are shown below: Construction cost of new building $ 1,000,000 Real estate and attorney fees 18,200 Architect fees 84,000 Cost to demolish old building 77,100 Salvage recovery from old building (13,000 ) Which of the following are the capitalized costs of the land and the new building, respectively? Multiple Choice A $843,200 and $1,148,100 B $920,300 and $1,071,000 C $825,000 and $1,166,300 D $907,300 and $1,084,000
A company is constructing a new production facility. The following costs have been incurred: Site preparation costs $50,000 Architects’ fees $26,000 Legal fees $10,000 Purchase of site $200,000 Costs incurred to relocate employees to the new facility $30,000 Administration costs $50,000 Total costs $366,000 The architects’ fees relate to the design of the new facility and the legal fees relate to legal advice received on the contract to purchase the site. The total value that should be recognized as Property, Plant and Equipment for the new facility should be Question 10Answer a. $ 314,000 b. $ 324,000 c. $ 344,000 d. $ 286,000
On January 6, Year 1, Mount Jackson Corporation purchased a tract of land for a factory site for $845,000. An existing building on the site was demolished and the new factory was completed on October 11, Year 1. Additional cost data are shown below: Construction cost of new building $ 1,032,000 Real estate and attorney fees Architect fees Cost to demolish old building Salvage recovery from old building What is the capitalized cost of the new building? O $1,205,900 O $1,120,000 O $1,105,000 O $1,184,900 21,000 88,000 79,900 (15,000)
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During the current fiscal year, Heinrich Corp. incurred the following costs related to property, plant, and equipment: Amount paid to the contractor for the building constructed P13,000,000 Building permit fee 120,000 Excavation cost 110,000 Architect fee 440,000 Interest that would have been earned had the money used during the period of construction been invested in the money market 330,000 Invoice cost of machine acquired, terms 3/10, n/30 6,500,000 Freight, unloading and delivery charges for machine acquired 100,000 Custom duties and other charges 270,000 Allowance and hotel accommodation, paid to foreign technicians during installation and test run of machine 520,000 Royalty payment on machines purchased (based on units produced and sold) 240,000 Cash paid for the purchase of land (none was allocated to old building) 10,000,000 Mortgage assumed on the land purchased 2,100,000 Realtor’s commission 650,000 Legal fees, realty taxes and documentation expenses 900,000 Amount…
During the fiscal year, ABC Company incurred the following costs related to property, plant and equipment: Amount paid to the contractor for the building constructed 12,000,000Building permit fee 120,000Excavation cost 110,000Architect fee 440,000Interest that would have been earned had the money used during theperiod of construction been invested in the money market 330,000Invoice cost of machine acquired, terms 8/10, n/30 6,500,000Freight, unloading and delivery charges for machine acquired 100,000Custom duties and other charges 270,000Allowance and hotel accommodation, paid to foreign techniciansduring installation and test run of machine 520,000Royalty payment on machines purchased (based on units producedand sold) 240,000Cash paid for the purchase of land (none was allocated to oldbuilding) 10,000,000Mortgage assumed on the land purchased 2,000,000Realtor’s commission 650,000Legal fees, realty taxes and documentation expenses 900,000Amount paid to relocate persons squatting on the…
Cala Manufacturing purchases land for $337,000 as part of its plans to build a new plant. The company pays $33,200 to tear down an old building on the lot and $49,078 to fill and level the lot. It also pays construction costs of $1,441,700 for the new building and $91,004 for lighting and paving a parking area. Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash. Please don't give image based answer..thanku