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$215,600
Transportation1,400
Insurance during shipping200
One-year fire insurance beginning August 1 of the current year1,200
Installation cost4,500
Raw materials and direct labor used to test the equipment1,500
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 building200,000
Proceeds from sale of salvaged materials from old building70,000
204.A company purchased land on which to construct a new building for a cost of $350,000. Additional costs incurred were:
Real estate broker’s commissions$24,500
Legal fees incurred in purchase of the real estate1,500
Landscaping8,000
Cost to remove old house located on land3,000
Proceeds from selling materials salvaged from old house1,000
What total dollar amount should be charged to Land and what amount should be charged to Building or other accounts?
205.A company made the following expenditures in connection with the construction of a new building:
Architect’s fees$12,000
Cash paid for land and unusable building on the land300,000
Removal of old building18,000
Salvage from sale of old building materials(4,000)
Construction survey1,500
Legal fees for title search3,000
Excavation for basement construction25,000
Machinery purchased for operations100,000
Storage and delivery charges on machinery because building was not ready when machinery was delivered
900
Freight on machinery purchased1,600
Construction costs of new building1,000,000
Installation of machinery2,500
Prepare a schedule showing the amounts to be recorded as Land, Buildings, and Machinery.