(Treatment of Various Costs)
Allegro Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment.
Abstract company’s fee for title search $ 520
Architect’s fees 3,170
Cash paid for land and dilapidated building thereon 92,000
Removal of old building $20,000
Less: Salvage 5,500
14,500
Interest on short term loans during construction 7,400
Excavation before construction for basement 19,000
Machinery purchased (subject to 2% cash discount,
which was not taken) 65,000
Freight on machinery purchased 1,340
Storage charges on machinery, necessitated by
noncompletion of building when machinery was 2,180
delivered
New building constructed (building construction took 6
months from date of purchase of land and old building) 485,000
Assessment by city for drainage project 1,600
Hauling charges for delivery of machinery from storage to
new building 620
Installation of machinery 2,000
Trees, shrubs, and other landscaping after completion of
building (permanent in nature) 5,400
Determine the amounts that should be debited to Land, to Buildings, and to Machinery and Equipment. Assume the benefits of capitalizing interest during construction exceed the cost of implementation. (If answer is zero, please enter 0, do not leave any fields blank.)
Land Buildings Machinery & Equipment Other
Abstract fee $ $ $ $
Architect’s fees
Cash paid for land and old building
Removal of old building
Interest on loans during construction
Excavation before construction
Machinery purchased
Freight on machinery
Storage charges caused by noncompletion of building
New building
Assessment by city
Hauling charges machinery
Installation machinery
Landscaping
$
$
$
$
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