AP10-3 - 1,710 Special tax assessment 4,200 Total $196,940...

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Solution AP10-3 Description/Account Debit Credit Land (Schedule A) 196,940 Building (Schedule B) 151,292 Retained earnings 55,100 Salary expense 33,100 Prepaid insurance (16 months × $96) 1,536 Organization expense 670 Insurance expense (6 months × $96) 576 Land and building 421,614 Additional paid-in capital (800 shares × $22) 17,600 Land and building 4,098 Depreciation expense 2,585 Accumulated depreciation-Building 1,513 Schedule A Amount consists of: Acquisition cost [$82,000 + (800 × $124)] $181,200 Removal of old building 9,830 Legal fees (Examination of title)
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Unformatted text preview: 1,710 Special tax assessment 4,200 Total $196,940 Schedule B Amount consists of: Legal fees (Construction contract) $ 2,000 Construction costs (First payment) 61,800 Construction costs (Second payment) 47,600 Insurance (2 months) [(2,304 ÷ 24) = $96 × 2 = $192] 192 Plant superintendent's salary 4,900 Construction costs (Final payment) 34,800 Total $151,292 Schedule C Depreciation taken $4,098 Depreciation that should be taken (1% × $151,292) (1,513) Depreciation adjustment $2,585...
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