Math / Numbers & Operations

QuestionPlant assets
22. Property, plant, and equipment are conventionally presented in the balance sheet at A) Replacement cost less accumulated depreciation B) Historical cost less salvage value () Original cost adjusted for general price-level changes D) Histonical cost less depreciated portion thereof
23. On December 1 of the current year, Horton Co purchased a tract of land as a factory site for \ $300,000. The old building on the property was razed, and salvaged materials resulting from demolition were sold. Additional costs incurred and salvage proceeds realized during December were as follows: Cost to raze old building$ $\$ 25,000$ $
Legal fees for purchase contract and to record ownership Title guarantee insurance Proceeds from sale of salvaged materials In Horton's cur atrats 4,000 land? A) $\$ 311,000$ B) $\$ 321,000$ C) $\$ 332,000$ D) $\$ 336,000$
24. During the year just ended, LDTD Co. made the following expenditures related to property acquired for a plant site: Purchase price Legal fies $\$ 300,000$ Costs of preparing the 130,000 $\begin{array}{ll}\text { Tiste esprance and recording fees } & 45,000 \\ & 15,000\end{array}$ Bour mach should be capitalized in the property account? A) $\$ 390,000$ B) $\$ 360,000$ C) 5345,000 D) $\$ 3300000$

Studdy Solution

STEP 1

1. For question 22, we need to identify the conventional presentation of property, plant, and equipment on the balance sheet.
2. For question 23, we need to calculate the total cost of land acquisition for Horton Co., considering all related costs and proceeds.
3. For question 24, we need to determine the total amount that should be capitalized in the property account for LDTD Co., considering all related expenditures.

STEP 2

1. Analyze the presentation of property, plant, and equipment on the balance sheet.
2. Calculate the total cost of land acquisition for Horton Co.
3. Determine the total amount to be capitalized for LDTD Co.

STEP 3

Analyze the presentation of property, plant, and equipment on the balance sheet.
- Property, plant, and equipment are typically presented at historical cost less accumulated depreciation.

STEP 4

Calculate the total cost of land acquisition for Horton Co.
- Start with the purchase price of the land: $\$300,000$ . - Add the cost to raze the old building: $\$25,000$ . - Add legal fees for purchase contract and to record ownership: $\$4,000$ . - Add title guarantee insurance: $\$2,000$ . - Subtract proceeds from the sale of salvaged materials: $\$10,000$ .

STEP 5

Perform the calculation:
$\text{Total Cost} = \$300,000 + \$25,000 + \$4,000 + \$2,000 - \$10,000 = \$321,000$

STEP 6

Determine the total amount to be capitalized for LDTD Co.
- Start with the purchase price: $\$300,000$ . - Add legal fees: $\$30,000$ . - Add costs of preparing the site: $\$45,000$ . - Add title insurance and recording fees: $\$15,000$ .

STEP 7

Perform the calculation:
$\text{Total Capitalized Amount} = \$300,000 + \$30,000 + \$45,000 + \$15,000 = \$390,000$
The answers to the questions are:
22. D) Historical cost less depreciated portion thereof
23. B) \$321,000
24. A) \$390,000

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Studdy Solution

STEP 1

STEP 2

1. Analyze the presentation of property, plant, and equipment on the balance sheet.
2. Calculate the total cost of land acquisition for Horton Co.
3. Determine the total amount to be capitalized for LDTD Co.

STEP 3

Analyze the presentation of property, plant, and equipment on the balance sheet.
- Property, plant, and equipment are typically presented at historical cost less accumulated depreciation.

STEP 4

STEP 5

Perform the calculation:
$\text{Total Cost} = \$300,000 + \$25,000 + \$4,000 + \$2,000 - \$10,000 = \$321,000$

STEP 6

Determine the total amount to be capitalized for LDTD Co.
- Start with the purchase price: $\$300,000$ . - Add legal fees: $\$30,000$ . - Add costs of preparing the site: $\$45,000$ . - Add title insurance and recording fees: $\$15,000$ .

STEP 7

Perform the calculation:
$\text{Total Capitalized Amount} = \$300,000 + \$30,000 + \$45,000 + \$15,000 = \$390,000$
The answers to the questions are:
22. D) Historical cost less depreciated portion thereof
23. B) \$321,000
24. A) \$390,000

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Studdy Solution

STEP 1

STEP 2

1. Analyze the presentation of property, plant, and equipment on the balance sheet.2. Calculate the total cost of land acquisition for Horton Co.3. Determine the total amount to be capitalized for LDTD Co.

STEP 3

Analyze the presentation of property, plant, and equipment on the balance sheet.- Property, plant, and equipment are typically presented at historical cost less accumulated depreciation.

STEP 4

STEP 5

Perform the calculation:Total Cost=$300,000+$25,000+$4,000+$2,000−$10,000=$321,000\text{Total Cost} = \$300,000 + \$25,000 + \$4,000 + \$2,000 - \$10,000 = \$321,000Total Cost=$300,000+$25,000+$4,000+$2,000−$10,000=$321,000

STEP 6

Determine the total amount to be capitalized for LDTD Co.- Start with the purchase price: $300,000 \$300,000 $300,000. - Add legal fees: $30,000 \$30,000 $30,000. - Add costs of preparing the site: $45,000 \$45,000 $45,000. - Add title insurance and recording fees: $15,000 \$15,000 $15,000.

STEP 7

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Download Studdy AI Tutor now. Learn with ease and get all help you need to be successful at school.

1. Analyze the presentation of property, plant, and equipment on the balance sheet.
2. Calculate the total cost of land acquisition for Horton Co.
3. Determine the total amount to be capitalized for LDTD Co.

Analyze the presentation of property, plant, and equipment on the balance sheet.
- Property, plant, and equipment are typically presented at historical cost less accumulated depreciation.

Perform the calculation:
$\text{Total Cost} = \$300,000 + \$25,000 + \$4,000 + \$2,000 - \$10,000 = \$321,000$

Determine the total amount to be capitalized for LDTD Co.
- Start with the purchase price: $\$300,000$ . - Add legal fees: $\$30,000$ . - Add costs of preparing the site: $\$45,000$ . - Add title insurance and recording fees: $\$15,000$ .