Current Attempt in Progress Skysong Brothers Inc. purchased land and an old building with the intention of removing the old building and then constructing the company's new corporate headquarters on the land. The land and old building were purchased for $565,000. Closing costs were $6,540. The old building was removed at a cost of $45,900. After readying the land for its intended use, and while waiting for construction to begin, Skysong generated net revenue of $3,270 from using the land as a parking lot. Determine the amount to be recorded as the land cost, and the treatment of the net revenue of $3,270, if Skysong prepares financial statements in accordance with (a) IFRS and (b) ASPE. Land cost $ IFRS The net revenue of $3,270 should be $ ASPE IFRS Capitalized and credited to Buildings account ASPE Recognized as income when earned

Current Attempt in Progress Skysong Brothers Inc. purchased land and an old building with the intention of removing the old building and then constructing the company's new corporate headquarters on the land. The land and old building were purchased for $565,000. Closing costs were $6,540. The old building was removed at a cost of $45,900. After readying the land for its intended use, and while waiting for construction to begin, Skysong generated net revenue of $3,270 from using the land as a parking lot. Determine the amount to be recorded as the land cost, and the treatment of the net revenue of $3,270, if Skysong prepares financial statements in accordance with (a) IFRS and (b) ASPE. Land cost $ IFRS The net revenue of $3,270 should be $ ASPE IFRS Capitalized and credited to Buildings account ASPE Recognized as income when earned

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 7PB: Tree Lovers Inc. purchased 2,500 acres of woodland in which it intends to harvest the complete...

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Current Attempt in Progress Skysong Brothers Inc. purchased land and an old building with the intention of removing the old building and then constructing the company's new corporate headquarters on the land. The land and old building were purchased for $565,000. Closing costs were $6,540. The old building was removed at a cost of $45,900. After readying the land for its intended use, and while waiting for construction to begin, Skysong generated net revenue of $3,270 from using the land as a parking lot. Determine the amount to be recorded as the land cost, and the treatment of the net revenue of $3,270, if Skysong prepares financial statements in accordance with (a) IFRS and (b) ASPE. Land cost $ IFRS The net revenue of $3,270 should be eTextbook and Media Save for Later $ ASPE IFRS Capitalized and credited to Buildings account ASPE Recognized as income when earned Attempts: 1 of 3 used v Submit Answer
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 $1,350,000 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 Cost for parking lot Demolition of old building Proceeds from sále of salvaged materials from old building $ 8,900,000 $260,000 200,000 70,000 Required: 1) Prepare a single journal entry to record the above costs assuming all transactions are paid in cash. 2) Using your value of the building asset from requirement 1, compute depreciation for the new building assuming $30,000 salvage value and a useful life of 30 years using straight-line depreciation.
On July 16, 20Y1, Wyatt Corp. purchased 40 acres of land for $350,000. The land has been held for a future plant site until the current date, December 31, 20Y9. On December 18, 20Y9, TexoPete Inc. purchased 40 acres of land for $2,000,000 to be used for a distribution center. The TexoPete land is located next to the Wyatt Corp. land. Thus, both Wyatt Corp. and TexoPete Inc. own nearly identical pieces of land.1. What are the valuations of land on the balance sheets of Wyatt Corp. and TexoPete Inc. using generally accepted accounting principles?2. How might fair value accounting aid comparability when evaluating these two companies?
The TLC Yogurt Company has decided to capitalize on the exercise fad and plans to open an exercise facility in conjunction with its main yogurt and health foods store. To get the project under way, the company will rent additional space adjacent to its current store. The equipment required for the facility will cost $50,000. Shipping and installation charges for the equipment are expected to total $5,000. This equipment will be depreciated on a straight-line basis over its five-year economic life to an estimated salvage value of $0. In order to open the exercise facility, TLC estimates that it will have to add about $7,000 initially to its net working capital in the form of additional inventories of exercise supplies, cash, and accounts receivable for its exercise customers. In addition, TLC expects that it will have to add about $5,000 per year to its net working capital in years 1, 2, and 3 and nothing in years 4 and 5. All net working capital that was spent…
The TLC Yogurt Company has decided to capitalize on the exercise fad and plans to open an exercise facility in conjunction with its main yogurt and health foods store. To get the project under way, the company will rent additional space adjacent to its current store. The equipment required for the facility will cost $50,000. Shipping and installation charges for the equipment are expected to total $5,000. This equipment will be depreciated on a straight-line basis over its five-year economic life to an estimated salvage value of $0. In order to open the exercise facility, TLC estimates that it will have to add about $7,000 initially to its net working capital in the form of additional inventories of exercise supplies, cash, and accounts receivable for its exercise customers. In addition, TLC expects that it will have to add about $5,000 per year to its net working capital in years 1, 2, and 3 and nothing in years 4 and 5. All net working capital that was spent…
Larkspur Brothers Inc. purchased land and an old building with the intention of removing the old building and then constructing the company's new corporate headquarters on the land. The land and old building were purchased for $580,000. Closing costs were $5,610. The old building was removed at a cost of $47,200. After readying the land for its intended use, and while waiting for construction to begin, Larkspur generated net revenue of $4,740 from using the land as a parking lot. Determine the amount to be recorded as the land cost, and the treatment of the net revenue of $4,740, if Larkspur prepares financial statements in accordance with (a) IFRS and (b) ASPE. Land cost IFRS The net revenue of $4,740 should be ASPE IFRS ASPE Capitalized and credited to Buildings account Recognized as income when earned
On July 16,20Y1, Wyatt Corp. purchased 40 acres of land for $350,000. The land has been held for a future plant site until the current date, December 31, 20Y9. On December 18, 20Y9, TexPete land Inc. purchased 40 acres of land for $2,000,000 to be used for a distribution center. The TexoPete land is located next to the Wyatt Corp. land. Thus both Wyatt Corp. and TexoPete Inc. own nearly identical pieces of land. 1. What are the valuations of the land on the balance sheets of Wyatt Corp. and TexoPete Inc. using generally accepted accounting principles? 2. How might fair value accounting aid comparability when evaluating these two companies?
Fresh Veggies, Incorporated (FVI), purchases land and a warehouse for $490,000. In addition to the purchase price, FVI makes the following expenditures related to the acquisition: broker's commission, $29,000; title insurance, $1,900; and miscellaneous closing costs, $6,000. The warehouse is immediately demolished at a cost of $29,000 in anticipation of building a new warehouse. Determine the cost of the land and record the purchase (assuming cash was paid for all expenditures). (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the purchase of the land. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general Journal
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 old building for $935,000 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 Cost for parking lot Demolition of old building Prepare a single journal entry to record the above costs assuming all transactions are paid in cash. View transaction list Journal entry worksheet
Use the following information for the next three questions:Altitude Company purchased a plot of land for ₱2,000,000 as a plant site. There was a small officebuilding on the plot, conservatively appraised at ₱700,000 which the company will continue to use withsome modification and renovation.The renovation had plans drawn for a factory and received bids for its construction. It rejected all bidsand decided to construct the plant itself. Below are listed additional items that management feelsshould be included in the property, plant and equipment accounts: Materials and supplies 3,000,000 Excavation 100,000 Labor on construction 2,500,000 Cost remodeling office building 200,000 Legal cost on conveying land 10,000 Imputed interest on corporation own money used during construction 120,000 Cash discounts on materials purchased, not taken 60,000 Supervision by management 70,000 Compensation insurance premium for workers 20,000 Clerical and other expenses related to…
(Acquisition Costs of Realty) Martin Buber Co. purchased land as a factory site for $400,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $42,000 to raze the old buildings and sold salvaged lumber and brick for $6,300. Legal fees of $1,850 were paid for title investigation and drawing the purchase contract. Martin Buber paid $2,200 to an engineering firm for a land survey, and $68,000 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insuranceon the property cost $1,500, and a liability insurance premium paid during construction was $900. The contractor’s charge for construction was $2,740,000. The company paid the contractor in two installments: $1,200,000 at the end of 3 months and $1,540,000 upon completion. Interest costs of $170,000 were incurred to finance the construction.InstructionsDetermine the cost of the land and the cost of the building…
Teradene Corporation purchased land as a factory site and contracted with Maxtor Construction to construct afactory. Teradene made the following expenditures related to the acquisition of the land, building, and equipmentfor the factory:Purchase price of the land $1,200,000Demolition and removal of old building 80,000Clearing and grading the land before construction 150,000Various closing costs in connection with acquiring the land 42,000Architect’s fee for the plans for the new building 50,000Payments to Maxtor for building construction 3,250,000Equipment purchased 860,000Freight charges on equipment 32,000Trees, plants, and other landscaping 45,000Installation of a sprinkler system for the landscaping 5,000Cost to build special platforms and install wiring for the equipment 12,000Cost of trial runs to ensure proper installation of the equipment 7,000Fire and theft insurance on the factory for the first year of use 24,000In addition to the above expenditures, Teradene purchased four…