201. A company purchased equipment on June 28 of the current year and placed it in service on August 1. The following costs were incurred in acquiring the equipment:
Purchase (invoice) price.......................
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$215,600
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Transportation.............................
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1,400
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Insurance during shipping.....................
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200
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One-year fire insurance beginning August 1 of the current year
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1,200
|
Installation cost............................
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4,500
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Raw materials and direct labor used to test the equipment.
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1,500
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Determine the amount to be recorded as cost for the equipment.
202. A company purchased land with a building for a lump-sum cost of $2,570,000 ($500,000 paid in cash and the balance on a long-term note). It was estimated that the land and building had market values of $600,000 and $2,400,000, respectively.
Determine the cost to be apportioned to the land and to the building and prepare the journal entry to record the acquisition.
203. A company needed a new building. It found a suitable location with an existing old building on the land. The company reached an agreement to buy the land and the building for $960,000 cash. The old building was demolished to make way for the needed new building. Following is information regarding the demolition of the old building and construction of the new one:
Construction cost of new building $8,900,000
Cost for parking lot………………………………………. $260,000
Demolition of old building…………………………………. 200,000
Proceeds from sale of salvaged materials from old building 70,000
Prepare a single journal entry to record the above costs assuming all transactions are paid in cash.