The Final Word Company Produces Word Processing Software

question 52

Essay

The Final Word Company produces word processing software.The company recently purchased a large tract of land on which will be constructed several buildings to house the production and administrative personnel of the company.The following improvements are expected to be made to the land as part of the construction of the complex:
1.The roads on all sides of the land will be graded and paved.
2.Street lights will be installed.
3.Sewer and drainage systems will be installed.
4.Several private roads will be constructed on the property.
5.Sidewalks will be constructed to connect the various buildings.
6.Parking lots will be constructed at selected places on the property for employee and customer parking.
7.The property will be suitably landscaped.
Required:
Explain how each of the above items would be accounted for in the records of Final Word Company.

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Definitions:

Percent Of Sales Method

A financial forecasting model that estimates future financial statements based on assumed sales growth and historical financial ratios.

Bad Debts

Unrecoverable amounts owed to a company by debtors that are deemed uncollectable and written off as a loss.

Receivables Methods

Methods used by businesses to manage and account for money owed to them by customers for goods or services delivered on credit.

Due Date

The specified date by which a task, assignment, payment, or project is expected or required to be completed or submitted.