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Question
January 2010, Giant Green Company pays $3,000,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office; it is appraised at $742,000, with a useful life of 25 years and a $75,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $400,500 that are expected to last another 18 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $2,020,600. Giant Green also incurs the following additional costs:
| Cost to demolish Building 1 | $ | 400,200 |
| Cost of additional land grading | 200,000 | |
| Cost to construct new building (Building 3), having a useful life of 25 years and a $322,000 salvage value | 3,851,000 | |
| Cost of new land improvements (Land Improvements 2) near Building 2 having a 20-year useful life and no salvage value | 122,000 |
What is the amount that should be recorded for land?
A $2,516,600
B. $2,020,600
C. $3,851,000
D. $1,916,400
E. $3,000,000
Answer
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Related questions
Q:
Periods
12 Percent 1
8929 2
1.6901 3
2.4018 4
3.0373 Assuming all revenue is to be received at the end of each year, what are the net cash flows for this investment if net present value equals ($11,790)?
A. $78,210
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E. $33,513
Q:
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Q:
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The process of restating future cash flows in terms of their present value is called _____________________.
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B. A monthly period separated into daily budgets.
C. A quarterly period separated into weekly budgets.
D. An annual period separated into weekly budgets.
E. An annual period separated into quarterly and monthly budgets.
Q:
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A. From the top down.
B. From the bottom up following a participatory process.
C. Solely by the budget committee.
D. By the CEO.
E. After the accounting period has begun.
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Preparing a master budget is usually the responsibility of:
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B. The marketing department.
C. A budget committee.
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E. Lower level management.
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May
June
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530
600 Ending Raw Materials Inventory
663 lbs. Ending Finished Goods Inventory
174 units Desired ending inventory:
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Finished goods = 20% of next month's sales
Pounds of raw material required for each finished Unit = 5 lbs.
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40,000 Bank loan payable
16,000 Additional data:
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(4) A minimum cash balance of $40,000 is required at the end of each month.
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B. It is not permitted to be used for financial reporting.
C. It is not permitted to be used for tax reporting.
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E. It requires only variable costs to be treated as product costs.
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When units produced exceed the units sold, income under absorption costing is higher than income under variable costing.