Garrison Company was organized on January 1. During the first year of operations

Question

Garrison Company was organized on January 1. During the first year of operations, the following expenditures and receipts were recorded in random order in the account, Land.

Analyze the foregoing transactions using the following tabular arrangement. Insert the amounts in the appropriate columns and select appropriate account title for transactions falling under other column. (Enter credit transactions with negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Debits 1. Cost of real estate purchased as a plant site (land and building). $250,000 2. Accrued real estate taxes paid at the time of the purchase of the real estate. 4,000 3. Cost of demolishing building to make land suitable for construction of a new building. 15,000 4. Architect's fees on building plans. 14,000 5. Excavation costs for new building. 24,000 6. Cost of filling and grading the land. 5,000 7. Insurance and taxes during construction of building. 6,000 8. Cost of repairs to building under construction caused by a small fire. 7,000 9. Interest paid during the year, of which $54,000 pertains to the construction period. 64,000 10. Full payment to building contractor. 780,000 11. Cost of parking lots and driveways. 46,000 12. Real estate taxes paid for the current year on the land. 4,000     Total Debits $1,219,000 Credits 13. Insurance proceeds for fire damage. $3,000 14. Proceeds from salvage of demolished building. 3,500     Total Credits $6,500 Item Land Buildings other Account Title Property Tax Expense Insurance Expense Depreciation Expense Maintenance and Repairs Expense Land Improvements Fire Loss Expense Interest Expense 4 6 10 12 13 14 Totals

Explanation / Answer

item land buildings other Account title 1 250,000 2 4,000 3 15,000 4 14,000 5 24,000 6 5,000 7 6,000 8 7,000 fire loss expense 9 54,000 10,000 interest exp 10 780,000 11 46,000 land improvements 12 4,000 propety taxes 13 -3,000 fire loss expense 14 -3,500 total 270,500 878000 64000

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