Gibbs Manufacturing Co. was incorporated on 1/2/14 but was unable to begin manuf
ID: 2447319 • Letter: G
Question
Gibbs Manufacturing Co. was incorporated on 1/2/14 but was unable to begin manufacturing activities until 8/1/14 because new factory facilities were not completed until that date. The Land and Buildings account at 12/31/14 per the books was as follows
Instructions
Determine the proper balances as of 12/31/14 for a separate land account and a separate buildings account. Use separate T-accounts (one for land and one for buildings) labeling all the relevant amounts and disclosing all computations.
~~ PLEASE POST THE ANSWER IN T ACCOUNT FORMAT, thank you! ~~
Explanation / Answer
1) Building
Date Particulars LF Amount Date Particulars Lf Amount
01/31/2014 To Bal C/d $657,150 01/31/2014 ByPurchase the Building A/c $160,000
N/A N/A N/A N/A N/A N/A N/A N/A N/ 01/31/2014 By Dilapidated A/c $100,000
N/A N/A N/A N/A A N/A N/A N/A 02/28/2014 By Cost of removed A/c $2,500
N/A N/A N/A N/A A N/A N/A N/A 04/01/2014 By Legal fees A/c $1,500
N/A N/A N/A N/A A N/A N/A N/A 05/01/2014 By Fire Insuarance A/c $3,150
N/A N/A N/A N/A A N/A N/A N/A 05/01/2014 By Partial payment A/c $190,000
N/A N/A N/A N/A A N/A N/A N/A 08/01/2014 By Final Payment A/c $190,000
N/A N/A N/A N/A A N/A N/A N/A 08/01/2014 By Plant Supervison A/c $10,000
____________________________________________________________________________-
Total $657,150 $657,150
______________________________________________________________________________
Purchase of Building =1000 shares * 160=$160,000
Cost of removed = $4,000 - 1,500 salvage value =$2,500
Fire Insurance = $5,400 *7months/12months(May to december)=$3,150
Dilapidated =$200,000 / 2= $100,000 ( half for land and another half for Building)
________________________________________________________________________
Land A/c
Date Particulars LF Amount Date Particulars Lf Amount
01/31/2014 To Appreciation $75,000 01/31/2014 ByPurchase the land A/c $100,000
N/A N/A N/A N/A N/A N/A $131,500 01/31/2014 By Dilapidated A/c $100,000
N/A N/A N/A N/A A N/A N/A N/A N/A 02/28/2014 By Cost of exam title A/c $2,000
N/A N/A N/A N/A A N/A N/A N/A 05/01/2014 By Legal fees A/c $4,500
______________________________________________________________________________
Total$206,500 $206,500
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.