Schedule of Property Dispositions

Cost Accumulated Cash Fair Nature of

Depreciation Proceeds Value Disposition
Land $40,000 — $31,000 $31,000 Condemnation
Building  15,000 —   3,600 — Demolition
Warehouse  70,000 $16,000  74,000  74,000 Destruction by
fire
Machine   8,000   2,800    900   7,200 Trade-in
Furniture  10,000   7,850 —   3,100 Contribution
Automobile   9,000   3,460   2,960   2,960 Sale

The following additional information is available.

Land: On February 15, a condemnation award was received as consideration for
unimproved land held primarily as an investment, and on March 31, another
parcel of unimproved land to be held as an investment was purchased at a cost
of $35,000.
Building: On April 2, land and building were purchased at a total cost of $75,000,
of which 20% was allocated to the building on the company books. The real
estate was acquired with the intention of demolishing the building, and this was
accomplished during the month of November. Cash proceeds received in
November represent the net proceeds from demolition of the building.
Warehouse: On June 30, the warehouse was destroyed by fire. The warehouse
was purchased January 2, 2016, and had depreciated $16,000. On December
27, the insurance proceeds and other funds were used to purchase a
replacement warehouse at a cost of $90,000.
Machine: On December 26, the machine was exchanged for another machine
having a fair value of $6,300 and cash of $900 was received. (The exchange
lacks commercial substance.)
Furniture: On August 15, furniture was contributed to a qualified charitable
organization. No other contributions were made or pledged during the year.
Automobile: On November 3, the automobile was sold to Jared Winger, a
shareholder.
Instructions

Indicate how these items would be reported on the income statement of Hollerith Co.
P10.5 (LO1, 2) (Classification of Costs and Interest Capitalization) On January 1,
2019, Blair Corporation purchased for $500,000 a tract of land (site number 101)
with a building. Blair paid a real estate broker's commission of $36,000, legal fees of
$6,000, and title guarantee insurance of $18,000. The closing statement indicated
that the land value was $500,000 and the building value was $100,000. Shortly after
acquisition, the building was razed at a cost of $54,000.
Blair entered into a $3,000,000 fixed-price contract with Slatkin Builders, Inc. on March
1, 2019, for the construction of an office building on land site number 101. The
building was completed and occupied on September 30, 2020. Additional construction
costs were incurred as follows.

Plans, specifications, and blueprints $21,000

Architects' fees for design and supervision 82,000

The building is estimated to have a 40-year life from date of completion and will be
depreciated using the 150% declining-balance method.
To finance construction costs, Blair borrowed $3,000,000 on March 1, 2019. The loan
is payable in 10 annual installments of $300,000 plus interest at the rate of 10%.
Blair's weighted-average amounts of accumulated building construction expenditures
were as follows.

For the period March 1 to December 31, 2019 $1,300,000

For the period January 1 to September 30, 2020 1,900,000

Instructions

a. Prepare a schedule that discloses the individual costs making up the balance in
the Land account in respect of land site number 101 as of September 30, 2020.
b. Prepare a schedule that discloses the individual costs that should be
capitalized in the Buildings account as of September 30, 2020. Show
supporting computations in good form.
P10.6 (LO2) (Interest During Construction) Cho Landscaping began construction of
a new plant on December 1, 2019 (all amounts in thousands). On this date, the
company purchased a parcel of land for ¥139,000 in cash. In addition, it paid ¥2,000
in surveying costs and ¥4,000 for a title insurance policy. An old dwelling on the
premises was demolished at a cost of ¥3,000, with ¥1,000 being received from the
sale of materials.
Architectural plans were also formalized on December 1, 2019, when the architect
was paid ¥30,000. The necessary building permits costing ¥3,000 were obtained from
the city and paid for on December 1 as well. The excavation work began during the
first week in December with payments made to the contractor in 2020 as follows.

Date of Payment Amount of Payment

March 1 ¥240,000
May 1  330,000
July 1   60,000

The building was completed on July 1, 2020.

To finance construction of this plant, Cho borrowed ¥600,000 from the bank on
December 1, 2019. Cho had no other borrowings. The ¥600,000 was a 10-year loan
bearing interest at 8%.
Instructions