The following payments and receipts are related to land, land improvements, and buildings acquired for use in the wholesale apparel business. The receipts are identified by an asterisk.
|a.||Fee paid to the attorney for title search||$3,600|
|b.||Cost of real estate acquired as a plant site: Land||$720,000|
|Building (to be demolished)||$60,000|
|c.||Finder’s fee paid to real estate agency||$23,400|
|d.||Delinquent real estate taxes on property, assumed by purchaser||$15,000|
|e.||Architect’s and engineer’s fees for plans for new building||$75,000|
|f.||Cost of removing building purchased with land in (b)||$10,000|
|g.||Proceeds from the sale of salvage materials from old building||$3,400|
|h.||Cost of filling and grading land||$18,000|
|i.||Premium on a one-year insurance policy during construction||$8,400|
|j.||Money borrowed to pay building contractor||$800,000|
|k.||Special assessment paid to the city for extension of the water main to the property||$13,400|
|l.||Cost of repairing windstorm damage during construction||$3,000|
|m.||Cost of repairing vandalism damage during construction||$2,000|
|n.||Cost of trees and shrubbery planted||$14,000|
|o.||Cost of paving parking lot to be used by customers||$21,600|
|p.||Interest incurred on building loan during construction||$40,000|
|q.||Proceeds from the insurance company for windstorm and vandalism damage||$4,500|
|r.||Payment to building contractor for new building||$800,000|
|s.||Refund of premium on insurance policy (i) canceled after 10 months||1,400|
1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts.
2. Determine the amount debited to Land, Land Improvements, and Building.