Gibbs Manufacturing Co. was incorporated on 1/2/14 but was unable to begin manufacturing activities until 8/1/14 because new factory facilities were not completed until that date. The Land and Buildings account at 12/31/14 per the books was as follows:
| Date | Item | Amount | ||
| 1/31/14 | Land and dilapidated building | $200,000 | ||
| 2/28/14 | Cost of removing building | 3,900 | ||
| 4/01/14 | Legal fees | 6,190 | ||
| 5/01/14 | Fire insurance premium payment | 5,112 | ||
| 5/01/14 | Special tax assessment for streets | 4,780 | ||
| 5/01/14 | Partial payment of new building construction | 188,900 | ||
| 8/01/14 | Final payment on building construction | 188,900 | ||
| 8/01/14 | General expenses | 30,800 | ||
| 12/31/14 | Asset write-up | 74,000 | ||
| $702,582 |
Additional information:
| 1. | To acquire the land and building on 1/31/14, the company paid $100,000 cash and 1,000 shares of its common stock (par value = $100/share) which is very actively traded and had a fair value per share of $160. | |||||||||||||
| 2. | When the old building was removed, Gibbs paid Kwik Demolition Co. $3,900, but also received $1,460 from the sale of salvaged material. | |||||||||||||
| 3. | Legal fees covered the following:
|
|||||||||||||
| 4. | The fire insurance premium covered premiums for a three-year term beginning May 1, 2014. | |||||||||||||
| 5. | General expenses covered the following for the period 1/2/14 to 8/1/14.
|
|||||||||||||
| 6. | Because of the rising land costs, the president was sure that the land was worth at least $74,000 more than what it cost the company. |
Determine the proper balances as of 12/31/14 for a separate land account and a separate buildings account.
| Land | $ |
|
| Buildings | $ |
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more