Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $315,000. The estimated fair values of the assets are land$60,000, building $220,000, and equipment$80,000. At what amounts should each of the three assets be recorded?

Martin Buber Co. purchased land as a factory site for $400,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months.

The company paid$42,000 to raze the old buildings and sold salvaged lumber and brick for $6,300. Legal fees of$1,850 were paid for title investigation and drawing the purchase contract. Martin Buber paid $2,200 to an engineering firm for a land survey, and$68,000 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $1,500, and a liability insurance premium paid during construction was$900. The contractor's charge for construction was $2,740,000. The company paid the contractor in two installments:$1,200,000 at the end of 3 months and $1,540,000 upon completion. Interest costs of$170,000 were incurred to finance the construction.

Determine the cost of the land and the cost of the building as they should be recorded on the books of Martin Buber Co. Assume that the land survey was for the building.

Presented below is selected information related to Martin Burke Inc. at year-end. All these accounts have debit balances.

Instructions

Identify which items should be classified as an intangible asset. For those items not classified as an intangible asset, indicate where they would be reported in the financial statements.

Fielder Company obtained land by issuing 2,000 shares of its $10 par value common stock. The land was recently appraised at$85,000. The common stock is actively traded at $40 per share. Prepare the journal entry to record the acquisition of the land.

Navajo Corporation traded a used truck (cost $20,000, accumulated depreciation$18,000) for a small computer with a fair value of $3,300. Navajo also paid$500 in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.)

Sea Scout purchased a car wash for $240,000. If purchased separately, the land would have cost$60,000, the building $135,000, and the equipment$105,000. Determine the amount that should be recorded in the new business’s records for land, building, and equipment.

The Loft Corporation purchased land and a building for $700,000. An appraisal indicates that the land's value is$400,000 and the building's value is $350,000. The amount that The Loft Corporation should debit to the Building account is:

A)$326,667

B) $350,000

C)$373,333

D) $375,000

Ottawa Corporation owns machinery that cost $20,000 when purchased on July 1, 2007. Depreciation has been recorded at a rate of$2,400 per year, resulting in a balance in accumulated depreciation of $8,400 at December 31, 2010. The machinery is sold on September 1, 2011, for$10,500. Prepare journal entries to (b) record the sale.

Garcia Corporation purchased a truck by issuing an $80,000, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck

Hanson Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,800,000 on March 1,$1,200,000 on June 1, and $3,000,000 on December 31. Compute Hanson's weighted-average accumulated expenditures for interest capitalization purposes.

Previn Brothers Inc. purchased land at a price of $27,000. Closing costs were$1,400. An old building was removed at a cost of $10,200. What amount should be recorded as the cost of the land?

Previn Brothers Inc. purchased land at a price of $27,000. Closing costs were$1,400. An old building was removed at a cost of $10,200. What amount should be recorded as the cost of the land

Calaf's Drillers erects and places into service an off-shore oil platform on January 1, 2021, at a cost of $10,000,000. Calaf is legally required to dismantle and remove the platform at the end of its useful life in 10 years. Calaf estimates it will cost$1,000,000 to dismantle and remove the platform at the end of its useful life in 10 years. (The fair value at January 1, 2021, of the dismantle and removal costs is $450,000.) Prepare the entry to record the asset retirement obligation.

Hanson Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,800,000 on March 1,$1,200,000 on June 1, and $3,000,000 on December 31. Compute Hanson’s weighted-average accumulated expenditures for interest capitalization purposes.

Hanson Company borrowed$1,000,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,000,000 note payable and an 11%, 4-year,$3,500,000 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. Compute avoidable interest for Hanson Company.