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Scissors Salons operate in several states The home office incurred the following costs to acquire land and a garage make land improvements and construct

Scissors Salons operate in several states. The home office incurred the following costs to acquire land and a garage, make land improvements, and construct and furnish the office building. a. Purchase price of land, including a building that will be used as a garage (land market value is $150,000; building market value is $50,000)……………………………………………………………………………… $180,000 b. Delinquent real estate taxes on the land to be paid by Scissors………………… 3,700 c. Landscaping (additional dirt and earth moving)……………………………………. 3,550 d. Title insurance on the land acquisition ………………………………………………… 1,000 e. Fence around the land………………………………………………………………………. 26,000 f. Building permit for the office building…………………………………………………. 200 g. Architect fee for the design of the office building………………………………….. 45,000 h. Company signs at near front and rear approaches to company property…… 53,550 i. Renovation of the garage………………………………………………………………….. 16,400 j. Concrete, wood, and other materials used in the office building……………… 322,000 k. Masonry, carpentry, and roofing to construct the office building…………….. 234,000 l. Interest cost on construction loan for office building……………………………… 3,400 m. Parking lots and concrete walks on the property …………………………………… 17,450 n. Lights for the parking lot, walkways, and company signs ………………………. 8,900 o. Salary of construction supervisor (90% to office building, 6% to land improvements, and 4% to garage renovation)……………………………. 55,000 p. Furniture for the office building…………………………………………………………. 61,500 q. Transportation of furniture from seller to the office building………………….. 1,300 r. Landscaping (trees and shrubs)………………………………………………………….. 9,100 Scissors Salons depreciates buildings over 40 years, land improvements over 20 years, and furniture over 8 years, all on a straight-line basis with zero residual value. Required 1. Set up columns for Land, Land Improvements, Office Building, Garage, and Furniture. Show how to account for each of Scissors’ costs by listing the cost under the correct account. Determine the total cost of each asset. 2. All construction was complete and the assets were placed in service on March 29. Record depreciation for the year ended December 31. Round figures to the nearest dollar. 3. How will what you learned in this problem help you manage a business? (Challenge)

Mar 16 2020 View more View Less

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