On July 1, 2018 Dryor & Jekel, Inc. purchased land and incurred other costs rela

Question

On July 1, 2018 Dryor & Jekel, Inc. purchased land and incurred other costs relative to the construction of a new warehouse. A summary of economic activities is listed below:

Required:

List the assets affected by the above transactions and give the resulting balance of each asset account.

Show your calculations.

Purchase price $185,000 Title Insurance 1,500 Legal fees to purchase land 1,000 Cost of razing old building on lot 8,500 Proceeds of sale of salvageable materials (1,200) Property taxes January 1,2018 - June 30, 2018 3,000 Cost of grading and filling building site 9,000 Cost of building construction 620,000 Interest on construction loan 12,000 Cost of constructing new driveway 8,000 Cost of parking lot and fencing 12,000

Explanation / Answer

Land a/c

Building Account

*Remaining Transactions are treated as Expenses hence it will not affect the Asset Account.

Debit Amount $ Credit Amount $ PurchasePrice 185,000 Title Insurance 1,500 Cost of razing old building on lot 8,500 Legal fees to purchase land 1,000 Balance Carried down 197,500

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