PROBLEM 10-3 - P ROBLE M 10-3 (a) 1. Land (Schedule A)

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Unformatted text preview: P ROBLE M 10-3 (a) 1. Land (Schedule A) .................................................. 180,700 Building (Schedule B)............................................ 146,250 I nsurance Expense (6 months X $95)............... 570 P repaid I nsurance (16 months X $95) .............. 1,520 Organization Expense ........................................... 610 Retained Ea rnings .................................................. 43,800 Salary Expense ........................................................ 32,100 Land and Building ........................................ 399,950 Additional Paid-in Capital .......................... 5,600 (800 shares X $7) Schedule A Amount Consists of: Acquisition Cost ($80,000 + [800 X $107] $165,600 Removal of Old Building 9,800 Legal Fees (Examination of title) 1,300 Special Tax Assessment 4,000 Total $180,700 Schedule B Amount Consists of: L egal Fees (Construction cont ract) $ 1,860 Construction Costs (Fi rst payment) 60,000 Construction Costs (Second payment) 40,000 I nsurance (2 months) ([2,280 ÷ 24] = $95 X 2 = $190) 190 Plant Superintendent’s Salary 4,200 Construction Costs (Final payment) 40,000 Total $146,250 2. Land and Building................................................... 4,000 Depreciation Expense................................. 2,537 Accumulated Depreciation—Building...... 1,463 10-50 PROBLE M 10-3 (Continued) Schedule C Depreciation taken $ 4,000 Depreciation that should be taken (1% X $146,250) (1,463) Depreciation adjustment $ 2,537 (b) Plant, P roper ty, and Equipment: Land $180,700 Building $146,250 L ess: Accumulated depreciation 1,463 144,787 Total $325,487 ...
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PROBLEM 10-3 - P ROBLE M 10-3 (a) 1. Land (Schedule A)

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