CALCULATOR STANDARD VIEW PRINTER VERSION NEXT SIGNMENT RESOURCES Sheffield Corp.

Question

CALCULATOR STANDARD VIEW PRINTER VERSION NEXT SIGNMENT RESOURCES Sheffield Corp. was organized on January 1. During the first year of operations, the following plant asset expenditures and receipts were recorded in random order Brief Exercise 9-6 Debit -Cost of filling and grading the land 2 Full payment to building contractor 3.Real estate taxes on land paid for the current year $4,500 697,000 4,500 154,000 39,500 14,500 2,500 13,500 25,500 eview Results by Study3Real estate taxes on la biective 4. Cost of real estate purchased as a plant site (land $108,000 and building $46,000) SExcavation costs for new building 6. Architect's fees on building plans 7.Accrued real estate taxes paid at time of purchase of real estate 8. Cost of parking lots and driveways 9Cost of demolishing building to make land suitable for construction of new building 955,500 Credit 10. Proceeds from salvage of demolished buildingo $4,000 transactions using the following column headinas. Insert the amounts in the appropriate columns. For amounts entered in the Other Accounts column, also indicate the account titles. (If an amount reduces the account balance then enter with a negative sign preceding the number, e.g. parenthesis, e.g. (15,000)) -15,000 or Item Land Buildings Other Accounts

Explanation / Answer

The following points are to analysed for solving this assignment

·         Land and building are real accounts any addition made in real account are debited and any deletion are made in real account is credited

Let us analyse item wise

·         In item 1 it is related to expenditure in land to make it suitable for further constructions on it , hence will be debited to land A/c

·         In item 2 the payment is made to building contractor for his services in making the building , hence debited to building a/c

·         In item 3 , taxes are paid after acquistion of land and will paid on annual basis . this will be debited to property tax expense which is a nominal acccount

·         Item 4 amount paid for real estate which will be debited to land account as the building in purchase is demolished and new building is constructed on it

·         Item 5 will be debited to building as excavation is make a foundation of new building

·         Item 6 will be debited to building as architect fees for building

·         Item 7 as taxes relate to land before purchase and will be debited to land account

·         Item 8 leads to land improvements

·         Item 9 will be debited to land as building is demolished on real estate purchased and construct new building

·         Item 10 will be credited to land on receipts on demolished building scrap sale

The details in the format is given below

Item

Land

Buildings

Other Accounts

Title

1

                     4,500

2

                    697,000

3

                          4,500

Property tax expense

4

                154,000

5

                       39,500

6

                       14,500

7

                     2,500

8

                        13,500

land improvements

9

                   25,500

10

                   (4,000)

                182,500

                    751,000

                        18,000

Item

Land

Buildings

Other Accounts

Title

1

                     4,500

2

                    697,000

3

                          4,500

Property tax expense

4

                154,000

5

                       39,500

6

                       14,500

7

                     2,500

8

                        13,500

land improvements

9

                   25,500

10

                   (4,000)

                182,500

                    751,000

                        18,000

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