Question

Cala Manufacturing purchases a large lot on which an old building is located as part of its plans to build a new plant. The negotiated purchase price is $287,000 for the lot plus $182,000 for the old building. The company pays $33,000 to tear down the old building and $48,783 to fill and level the lot. It also pays a total of $1,817,302 in construction costs—this amount consists of $1,709,400 for the new building and $107,902 for lighting and paving a parking area next to the building.

 

Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash.

Journal Entry Worksheet

Record the total costs of the plant assets.

Cala Manufacturing purchases a large lot on which an old building is located as part of its plans to build a new plant. The negotiated purchase price is $287,000 for the lot plus $182,000 for the old building. The company pays $33,000 to tear down the old building and $48,783 to fill and level the lot. It also pays a total of $1,817,302 in construction costs—this amount consists of $1,709,400 for the new building and $107,902 for lighting and paving a parking area next to the building.

 



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *