Acquisition Cost of Long-Lived Assets The Cost of land site, which Legal fees, i

Question

Acquisition Cost of Long-Lived Assets The Cost of land site, which Legal fees, including fee for title search Payment of apartment building mortgage and related interest due at time of sale Payment for delinquent property taxes assumed by the purchaser Cost of razing the apartment building Proceeds from sale of salvaged materials Grading to establish proper drainage flow on land site Architect's fees on new building Proceeds from sales of excess dirt (from basement excavation) to owner of adjoining property (dirt was used to fill in a low area on property) Payment to building contractor Payment of medical bills of employee accidentally injured while imspecting building construction Special assessment for paving city sidewalks (paid to city) Cost of paving driveway and parking lot Cost of Installing lights in parking lot Premium for insurance on building during construction Cost of open house party to celebrate opening of new building an old apartment building appraised at $75,000 $166,000 9,400 4,100 18,000 (3,900) 310,000 (3,000) 6,000,000 9,000 26,000 10,200 8,500 9,000 Required From the given data, calculate the proper balances for the Land, Building, and Land Improvements accounts of Lowrey Company Land Land ents $ 36,20

Explanation / Answer

Note: The payment of medical bills of employee accidentally injured while inspecting building construction and the cost of open house party to celebrate opening of new building are not costs incurred for getting the asset ready for its intended use and hence not capitalized.

Land Building Land Improvement Cost of land site, which included an old apartment building 166000 Legal fees, including fee for title search 2200 Payment of apartment building mortgage and related interest due at time of sale 9400 Payment of delinquent property taxes assumed by the purchaser 4100 Cost of razing the apartment building 18000 Proceeds from sale of salvaged materials -3900 Grading to establish proper drainage flow on land site 2000 Architect's fees on new building 310000 Proceeds from sale of excess dirt (from basement excavation) -3000 Payment to building contractor 6000000 Special assessment for paving city sidewalks (paid to city) 19000 Cost of paving driveway and parking lot 26000 Cost of installing lights in parking lot 10200 Premium for insurance on building during construction 8500 Total $ 216800 6315500 36200

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