Share
Explore BrainMass

Which amounts to be included in land, land improvements

Diaz Company was organized on January 1. During the first year of operations, the following plant asset
expenditures and receipts were recorded in random order.
Instructions
Analyze the foregoing transactions using the following column headings. Insert the number of each transaction in
the Item space, and insert the amounts in the appropriate columns. (If answer is zero, please enter 0, do
not leave any fields blank. If expenditure decreases balance then put the amount in parenthesis.)
Debits
1. Cost of filling and grading the land $6,400
2. Full payment to building contractor 703,000
3. Real estate taxes on land paid for the current year 6,720
4. Cost of real estate purchased as a plant site (land $104,559 and building $44,811) 149,370
5. Excavation costs for new building 37,710
6. Architect's fees on building plans 10,180
7. Accrued real estate taxes paid at time of purchase of real estate 2,990
8. Cost of parking lots and driveways 15,440
9. Cost of demolishing building to make land suitable for construction of new building 16,140
$947,950
Credits
10.Proceeds from salvage of demolished building $4,920

Attachments

Solution Preview

Please see the attached file
Item Land Building Other Account
1 6,400 This is to make land suitable for use and so cost of ...

Solution Summary

The solution explains the classification of various expenditures into land, land improvements, building and other accounts

$2.19