Exercise 10-1 The expenditures and receipts below are related to land, land impr
ID: 2411245 • Letter: E
Question
Exercise 10-1 The expenditures and receipts below are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are enclosed in parentheses Money borrowed to pay building contractor (signed a note) Payment for construction from note proceeds Cost of land fill and clearing Delinquent real estate taxes on property assumed by purchaser Premium on 6-month insurance policy during construction Refund of 1-month insurance premium because construction completed early Architect's fee on building (a) (b) (c) $(288,600) 288,600 10,260 8,910 7,620 (1,270) 26,390 260,000 9,750 4,170 10,420 (4,900) 13,370 17,790 14,170 2,790 (d) (e) (f) (g) (h) Cost of real estate purchased as a plant site (land $201,000 and building $59,000) (i) Commission fee paid to real estate agency (j) Installation of fences around property (k) Cost of razing and removing building (I) (m) (n) (o) (p) Proceeds from salvage of demolished building Interest paid during construction on money borrowed for construction Cost of parking lots and driveways Cost of trees and shrubbery planted (permanent in nature) Excavation costs for new building Identify each item by letter and list the items in columnar form, using the headings shown below. All receipt amounts should be reported in parentheses. For any amounts entered in the Other Accounts column, also indicate the account title. (Enter receipt amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45). If no entry is required in other accounts, select "No Entry" for the account titles.)Explanation / Answer
Land Land Imrovement Building Other Account a) Money borrowed to pay building contractor (signed a note) -282,800 -282,800 (b) Payment for construction from note proceeds 282,800 282,800 (c) Cost of land fill and clearing 11,770 11,770 (d) Delinquent real estate taxes on property assumed by purchaser 7,920 7,920 (e) Premium on 6-month insurance policy during construction 11,460 11,460 (f) Refund of 1-month insurance premium because construction completed early -1,910 -1,910 (g) Architect’s fee on building 26,160 26,160 (h) Cost of real estate purchased as a plant site (land $201,700 and building $54,400) 256,100 256,100 (i) Commission fee paid to real estate agency 8,410 8,410 (j) Installation of fences around property 4,280 4,280 (k) Cost of razing and removing building 11,740 11,740 (l) Proceeds from salvage of demolished building -5,090 -5,090 (m) Interest paid during construction on money borrowed for construction 12,550 12,550 (n) Cost of parking lots and driveways 20,330 20,330 (o) Cost of trees and shrubbery planted (permanent in nature) 13,380 13,380 (p) Excavation costs for new building 3,010 3,010
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