The following expenditures are related to land, landimprovements and buildings, which were acquired on November 1,2015.
Cost of real estate acquired for a new manufacturing plantS365,000 (the land is appraised for $262,800 and the building for$102,200)
Real estate taxes paid by the purchaser......$20,000
Cost of removing a barn..... $8,500
Architect's fees for updating the building..... $6750
Attorneys fees for closing the sale..... $12500
Grading land.... $3500
paving parking lot......$7000
Planting trees and shrubs.......$9250
Cost of repairs to building due to storm duringconstruction..... $1300
lights placed on driveway .... $750
fee to real estate broker..... $2500
a) determine the cost of the land, the building and theimprovements (round to nearest dollar)
b)prepare journal entries on Dec. 31, 2015 for depreciationassuming the building will have a useful life of 20 years and noresidual value. Use double declining balance method and thehalf-year convention. Depreciate the land improvements usingstraight line method, a 5 year life, to the nearest month with zeroresidual value (to the nearest dollar).
