The Following Expenditures Are Related to Land, Land Improvements, and Buildings

Essay

The following expenditures are related to land, land improvements, and buildings, which were acquired on November 1, 2009. $$\begin{array} { | l | l | } \hline \text { Cost of real estate acquired for a new manufacturing plant } & \$ 365,000 \\\hline \text { The land is appraised for } \$ 262,800 \text { and the building for } & \\\hline \$ 102,200 . & \\\hline \text { Real estate taxes paid by the purchaser } &\$ 20,000 \\ \hline \text { Cost of removing a barn } &\$ 8,500\\\hline \text { Architect's fees for updating building } & \$ 6,750 \\\hline \text { Attorney's fees for closing sale } & \$ 12,500 \\\hline \text { Grading land } &\$ 3,500 \\\hline \text { Paving parking lot } & \$ 7,000 \\\hline \text { Planting trees and shrubs } &\$ 9,250 \\\hline \text { Cost of repairs to building due to storm during construction } & \$ 1,300 \\\hline \text { Lights placed on driveway } &4750 \\\hline \text { Fee to real estate broker } &\$ 2,500 \\\hline &\end{array}$$ Required:
Determine the cost of the land, the building and the improvements (Round to the nearest dollar)
Prepare journal entries on 31 December, 2009 for depreciation assuming the building will have a useful life of 20 years and no residual value. Use double declining balance method and the half-year convention. Depreciate the land improvements using straight-line method, a 5 year life, to the nearest month with zero residual value (to the nearest dollar).