On January 1, 2015, Coopers Industries bought a parcel of land for use in its operations by paying the seller $100,000 in cash and signing a 5-year, 12 percent note payable in the amount of $400,000. In connection with the purchase of the land, Coopers incurred legal fees of $19,000, a real estate agent sales commission of $25,000, surveying fees of $1,000, and an appraisal fee of $5,000. The acquisition cost of the land is

On January 1, 2015, Coopers Industries bought a parcel of land for use in its operations by paying the seller $100,000 in cash and signing a 5-year, 12 percent note payable in the amount of $400,000. In connection with the purchase of the land, Coopers incurred legal fees of $19,000, a real estate agent sales commission of $25,000, surveying fees of $1,000, and an appraisal fee of $5,000. The acquisition cost of the land is

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 43P

See similar textbooks

Similar questions

Coopers Industries purchased a block of land for use in its activities on January 1, 2019, by paying the seller $100,000 in cash and signing a five-year, 12% note due in the amount of $400,000. Coopers paid $19,000 in legal expenses, $25,000 in real estate agent commissions, $1,000 in surveying fees, and $5,000 in appraisal fees in connection with the land transaction. The land's purchasing cost is.
On January 1, 2019, Coopers Industries bought a parcel of land for use in its operations by paying the seller $100,000 in cash and signing a 5-year, 12 percent note payable in the amount of $400,000. In connection with the purchase of the land, Coopers incurred legal fees of $19,000, a real estate agent sales commission of $25,000, surveying fees of $1,000, and an appraisal fee of $5,000. The acquisition cost of the land is A. 550,000 B. 450,000 C. 119,000 D. 500,000
On July 1, 2018, Apache Company, a real estate developer, sold a parcel of land to a construction company for $4,200,000. The book value of the land on Apache's books was $1,800,000. Terms of the sale required a down payment of $300,000 and 13 annual payments of $300,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2019. How much revenue will Apache recognize for the sale (ignoring interest), assuming that it recognizes revenue at the point in time at which it transfers the land to the construction company? (Leave no cells blank - be certain to enter "O" wherever required.) 2018 2019 Revenue
On March 1, 2019, Westmorlan Company acquired real estate on which it planned to construct a small office building. The company paid $75,000 in cash. An old warehouse on the property was razed at a cost of $8,600; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,100 attorney’s fee for work concerning the land purchase, $5,000 real estate broker’s fee, $7,800 architect’s fee, and $14,000 to put in driveways and a parking lot.(a)Determine the amount to be reported as the cost of the land.
Klaus, Inc. has the ff. information regarding their intangible assets. Klaus spent P2,600,000 of experimental and development costs in its laboratory to develop a patent which was granted on January 2, 2018. Legal fees and other costs associated with the registration of the patent totaled P544,000. Klaus estimates that the useful life of the patent will be 8 years. Klaus purchased a trademark from Nikolai Co. for P1,280,000 on July 1, 2015. The trademark was successfully defended for a total cost of P326,400 which were paid on July 1, 2017. Klaus estimates that the useful life of the trademark will be 20 years from the date of acquisition. Klaus signed an agreement on January 1, 2018, to operate as a franchise of Chooks to Go. For an initial franchise fee of P3,000,000. Of this amount, P600,000 was paid when the agreement was signed and the balance is payable in 4 annual installments of P600,000 each, beginning January 1, 2019. The downpayment is nonrefundable and no future services…
On January 2, 2022, Lauren Corporation purchased factory equipment for $850,000. In addition, it paid $82,000 in sales tax and $7,000 in installation charges. Shipping costs to ship the equipment to the factory were $2,500 and were paid by Lauren. Lauren paid $300,000 in cash and signed a two-year note for the balance. Required: Prepare the journal entry to record the acquisition of this equipment. Assuming straight-line depreciation, an estimated residual value of $75,000 and an estimated life of 10 years, prepare the journal entry for the depreciation expense for 2021.
XYZ Company, a calendar year business, purchased machinery on February 2, 2016. The purchase price of the machinery was $90,000 and the machinery was subject to a 7% sales tax on the purchase price. The company paid $1,500 to have the machinery delivered and set up at its factory. What is the initial basis of the asset?
On March 1, 2020, Westmorlan Company acquired real estate on which it planned to construct a small office building. The company paid $75,000 in cash. An old warehouse on the property was razed at a cost of $8,600; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,100 attorney’s fee for work concerning the land purchase, $5,000 real estate broker’s fee, $7,800 architect’s fee, and $14,000 to put in driveways and a parking lot.Instructions(a) Determine the amount to be reported as the cost of the land.(b) For each cost not used in part (a), indicate the account to be debited.
On March 1, 2025, Wildhorse Co. acquired real estate, on which it planned to construct a small office building, by paying $80,000 in cash. An old warehouse on the property was demolished at a cost of $8,200; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,200 attorney's fee for work concerning the land purchase, $4,500 real estate broker's fee, $8,700 architect's fee, and $14,000 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of the land $
On July 1, 2018, Apache Company, a real estate developer, sold a parcel of land to a construction company for$3,000,000. The book value of the land on Apache’s books was $1,200,000. Terms of the sale required a downpayment of $150,000 and 19 annual payments of $150,000 plus interest at an appropriate interest rate due oneach July 1 beginning in 2019. How much revenue will Apache recognize for the sale (ignoring interest), assuming that it recognizes revenue at the point in time at which it transfers the land to the construction company?
On March 1, 2022, Crane Corporation acquired real estate, on which it planned to construct a small office building, by paying $83,200 in cash. An old warehouse on the property was demolished at a cost of $8,480; the salvaged materials were sold for $1,720. Additional expenditures before construction began included a $1,560 legal fee for work concerning the land purchase, a $9,440 architect's fee, and $14,560 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of Land $
In 2018, Bratten Fitness Company made the following cash purchases:1. The exclusive right to manufacture and sell the X-Core workout machine from Symmetry Corporation for$200,000. Symmetry created the unique design for the machine. Bratten also paid an additional $10,000 inlegal and filing fees to attorneys to complete the transaction.2. An initial fee of $300,000 for a three-year agreement with Silver’s Gym to use its name for a new facility inthe local area. Silver’s Gym has locations throughout the country. Bratten is required to pay an additional feeof $5,000 for each month it operates under the Silver’s Gym name, with payments beginning in March 2018.Bratten also purchased $400,000 of exercise equipment to be placed in the new facility.3. The exclusive right to sell Healthy Choice, a book authored by Kent Patterson, for $25,000. The bookincludes healthy recipes, recommendations for dietary supplements, and natural remedies. Bratten plans todisplay the book at the check-in counter…