Question

Cullumber Company was organized on January 1. During the first year of operations, the following plant asset expenditures and

receipts were recorded in random order.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Debit
Excavation costs for new building
Architect's fees on building plans
Full payment to building contractor
Cost of real estate purchased as a plant site
Cost of parking lots and driveways
Accrued real estate taxes paid at time of purchase of land
Installation cost of fences around property
Cost of demolishing building to make land suitable for construction of new building
Real estate taxes paid for the current year on land
Credit
Proceeds from salvage of demolished building
$21,000
33,000
686,000
288,000
29,000
3,200 '
6,400
29,000
6,400
$1,102,000
$12,000

Analyze the transactions using the following table column headings. Enter the amounts in the appropriate columns. For amounts in the Other Accounts column, also indicate the account title. (If an amount reduces the account balance then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).)
Item
Land
Building
Other Accounts
Account Titles

Answer 1

Item Land Building Other Accounts Account Titles

1 3200 21000 288000 Cost of real estate purchased as a plant site

2 29000 33000 29000 Cost of parking lots and driveways

3 6400 686000 6400 Installation cost of fences around property

Total 38600 728000 323400

The land account includes the cost of the real estate purchased as a plant site ($288,000), the accrued real estate taxes paid at the time of purchase of the land ($3,200), and the cost of demolishing the building to make the land suitable for construction of the new building ($29,000).

The building account includes the excavation costs for the new building ($21,000), the architect's fees on building plans ($33,000), and the full payment to the building contractor ($686,000).

The other accounts include the cost of parking lots and driveways ($29,000), the installation cost of fences around the property ($6,400), and the proceeds from the salvage of the demolished building ($12,000)