Question

Chapter 08 Homework o Saved Cala Manufacturing purchases a large lot on which an old building is located as part of its plans to build a new plant. The negotiated purchase price is $227,000 for the lot plus $122,000 for the old building. The company pays $31,100 to tear down the old building and $45.974 to fill and level the lot. It also pays a total of $1,837,608 in construction costs—this amount consists of $1,728,500 for the new building and $109,108 for lighting and paving a parking area next to the building. points Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash. View transaction list eBook Journal entry worksheet Hint Print Record the total costs of the plant assets. References Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal

Answer 1

Solution:

Cost of Land
Purchase price of Land	227000
Purchase price of old Building	122000
Tear Down Cost of Old building	31100
Cost to Fill and level the lot	45974
Total cost of Land	426074
Cost of Building
Construction cost of new building	1728500
Cost of Land Improvement
Construction cost of parking area	109108

Transaction	General Journal	Debit	Credit
1	Land	426074
	Building	1728500
	Land Improvements	109108
	Cash		2263682