View the step-by-step solution to:

At December 31, 2011, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet had the following...

At December 31, 2011, certain accounts included in the property, plant, and equipment section of Reagan Company’s balance sheet had the following balances.

Land $238,340
Buildings 909,260
Leasehold improvements 661,230
Equipment 882,630

During 2012, the following transactions occurred.

1. Land site number 621 was acquired for $851,790. In addition, to acquire the land Reagan paid a $53,350 commission to a real estate agent. Costs of $39,750 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $18,390.
2. A second tract of land (site number 622) with a building was acquired for $423,450. The closing statement indicated that the land value was $306,130 and the building value was $117,320. Shortly after acquisition, the building was demolished at a cost of $43,670. A new building was constructed for $337,920 plus the following costs.

Excavation fees $41,800
Architectural design fees 14,900
Building permit fee 3,060
Imputed interest on funds used during construction (stock financing) 8,960

The building was completed and occupied on September 30, 2012.

3. A third tract of land (site number 623) was acquired for $652,700 and was put on the market for resale.
4. During December 2012, costs of $95,380 were incurred to improve leased office space. The related lease will terminate on December 31, 2014, and is not expected to be renewed. (Hint: Leasehold improvements should be handled in the same manner as land improvements.)
5. A group of new machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machines was $85,090, freight costs were $3,630, installation costs were $3,030, and royalty payments for 2012 were $18,140.

Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2012. Disregard the related accumulated depreciation accounts.

Balance at December 31, 2012
Leasehold improvements
Sign up to view the entire interaction

Top Answer

Hi please find the attached... View the full answer


Reagan’s Company
Analysis of Land Account for 2012
Particulars Amount $ Opening Balance of land 238,340 Land Site No. 621
Acquisition Cost 851,790 Commission to real estate
agent 53,350...

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.


Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online