Land site number 101: Acquisition cost $6,000,000 Commission to real estate agent 360,000 Clearing costs $60,000 Less amount recovered (32,000) 28,000 Total land site number 101 6,388,000 Land site number 102: Land value 800,000 Building 400,000 Demolition 80,000 Total land site number 102 1,280,000 Balance at 31 December $8,868,000 b) Analysis of Buildings Account Balance at 1 January $2,600,000 Cost of new building on land site number 102: Construction costs $600,000 Excavation fees 24,000 Architectural design 32,000 Building permit fee 8,000 664,000 Balance at 31 December $3,264,000 c) Site 103 is not analyzed since the land is “held for sale” therefore would not be included in property, plant and equipment or land. Analysis of Leasehold Improvements Account Balance at 1 January 1,600,000 Electrical work 180,000 Construction of extension to current work area ($300,000 x 1/2) 150,000 Office space improvements 240,000 Balance at 31 December $2,170,000 d) Analysis of Machinery and Equipment Account Balance at 1 January $3,200,000 Cost of new machines acquired: Invoice $540,000 Freight costs 4,000 Unloading charges 6,000 550,000 Balance at 31 December $3,750,000
Land site number 101: Acquisition cost $6,000,000 Commission to real estate agent 360,000 Clearing costs $60,000 Less amount recovered (32,000) 28,000 Total land site number 101 6,388,000 Land site number 102: Land value 800,000 Building 400,000 Demolition 80,000 Total land site number 102 1,280,000 Balance at 31 December $8,868,000 b) Analysis of Buildings Account Balance at 1 January $2,600,000 Cost of new building on land site number 102: Construction costs $600,000 Excavation fees 24,000 Architectural design 32,000 Building permit fee 8,000 664,000 Balance at 31 December $3,264,000 c) Site 103 is not analyzed since the land is “held for sale” therefore would not be included in property, plant and equipment or land. Analysis of Leasehold Improvements Account Balance at 1 January 1,600,000 Electrical work 180,000 Construction of extension to current work area ($300,000 x 1/2) 150,000 Office space improvements 240,000 Balance at 31 December $2,170,000 d) Analysis of Machinery and Equipment Account Balance at 1 January $3,200,000 Cost of new machines acquired: Invoice $540,000 Freight costs 4,000 Unloading charges 6,000 550,000 Balance at 31 December $3,750,000
FA2_Ch9_text_solutions.docx