NFCPAR- Auditing Problems

Solution Guide Property, Plant, and Equipment

CASE NO.1 LAND OLD NEW LI NOTES

BLDG BLDG
8,750,000 1,250,000 - - (1)
1. Unpaid real property taxes up to the (2)
date of acquisition 12,250 1,750
2. Cost of option of the acquired property 17,500 2,500 (2)
3. Excavation cost 12,000 (3)
4. Escrow fees on the properties acquired 9,625 1,375 (2)
5. Cost of relocating and reconstructing 2,875 (2)
the property belonging to others in order 20,125
to acquire the property
6. Payment to real estate agent 35,000 5,000 (2)
7. Payments to tenants of the building to 2,625 375 (2)
induce them to vacate the premises
8. Legal fees for contract to purchase 11,000 (3)
land
9. Cost of removing trees from the land 70,000 (3)
10. Building permit and licenses 60,000 (3)
11. Architect fee 50,000 (3)
12. Materials used in all construction 600,000 (3)
13. Driveway and walk to building (part 30,000 (3)
of the building plan)
14. Payment for claim for injuries not (4)
covered by insurance - - - -
15. Broker’s fee on the properties 8,750 1,250 (2)
acquired
16. Rental fees generated on the portion (5)
of the building being used as a parking
site - - - -
17. Cost of paving parking lot adjoining 50,000 (6)
building
18. Other overhead cost incurred as a 220,000 (3)
result of construction
19. Service equipment and fixture made a 11,000 (3)
PERMANENT part of the structure
20. Safety fence around construction site 35,000 (3)
21. Removal of safety fence 9,800 (3)
22. Demolition cost of the old building 33,000 (3)
23. Proceeds from salvage of the (4,000) (3)
demolition
TOTAL 8,926,875 1,265,125 1.056,800 50,000

Cost allocated to Land:

Cost allocated to Bldg:

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