A Company Made the Following Expenditures in Connection with the Construction

question 77

Essay

A company made the following expenditures in connection with the construction of its
new building:
$\begin{array}{|l|r|}\hline\text { Architect's fees for the new building } & \$ 12,000 \\\hline \text { Cash paid for land and run-down building on the land } & 300,000 \\\hline \text { Removal of old building } & 18,000 \\\hline \text { Salvage from sale of old building materials } & 4,000 \\\hline \text { Construction survey to site the new building } & 1,500 \\\hline \text { Legal fees for title search } & 3,000 \\\hline \text { Excavation for basement construction } & 25,000 \\\hline \text { Machinery purchased for operations } & 100,000 \\\hline\begin{array}{l}\text { Storage charges on machinery because building was } \\\text { not ready when machinery was delivered }\end{array} & 900 \\\hline \text { Freight on machinery purchased } & 1,600 \\\hline \begin{array}{l}\text { Hauling charges to delivery machinery from } \\\text { Storage to new building }\end{array} & 300 \\\hline \text { Construction costs of new building } & 1,000,000 \\\hline \text { Landscaping } & 20,000 \\\hline \text { Installation of machinery } & 2,500\\\hline\end{array}$

Prepare a schedule showing the amounts to be recorded as Land,Buildings and Machinery.

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Definitions:

Compounded Annually

Interest calculation method where interest is added to the principal at the end of each year, and future interest calculations include this additional amount.

Interest

The cost of borrowing money or the return on investment for lenders, typically expressed as a percentage.

Rate of Return

The gain or loss on an investment over a specific period, expressed as a percentage of the investment's initial cost.

Interest Rate

The fee, shown as a percentage of the principal, that a lender requires from a borrower for the utilization of assets.