Mike s Lemonade Stand AILS purchased a parcel of land

for #3979
Mike’s Lemonade Stand (AILS) purchased a parcel of land for 510,000,000 on March 31. The
site was available at a reasonable price. The company has a strategic plan to build a large
warehouse in the area sometime in the next five years. The real estate agent representing MLS
was paid $50,000. Title search and legal fees were $40,000.MLS paid a fee to have the site
rezoned for use as a warehouse rather than for residential use: $100,000. The company paid
the seller $30,000 for the unexpired portion of property' tax on the site. This property' tax expires
on June 30th. Property' tax for the last half of the year was $70,000. A number of abandoned
homes on the site were demolished for $90,000. In the process of demolition, MLS received
$15,000 for items salvaged from the homes.As the site will remain vacant for a few years, MLS
spent $200,000 landscaping it and putting in a sports field. MLS did this as part of a deal with
the local residents so they would support the rezoning application. MLS spent $10,000 on food
and entertainment to host a groundbreaking ceremony for the park opening. Senior managers
and the president visited the party' and were paid $5,000 in salaries while there. The company
further spent $35,000 to advertise their good corporate citizenship using the example of the
park and ceremony. During the remaining part of the year $20,000 was spent to maintain the
field. AILS erected fences for $55,000 around part of the site to prevent children from harming
themselves.AILS spent $25,000 on consulting fees to determine where the most appropriate
site for the warehouse should be. Numerous sites were identified, including the one
purchased.Required:Identify' whether and where AILS should capitalize each of the above
expenditures. Briefly justify each of your responses.View Solution:
Mike s Lemonade Stand AILS purchased a parcel of land for

ANSWER
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