Reference no: EM132346065

Question

At December 31, 2016, certain accounts included in the property, plant, and equipment section of Nash Company's balance sheet had the following balances.

Land $231,100

Buildings 903,300

Leasehold improvements 660,700

Equipment 876,000

During 2017, the following transactions occurred.

1. Land site number 621 was acquired for $854,300. In addition, to acquire the land Nash paid a $57,200 commission to a real estate agent. Costs of $40,200 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $13,800.2.

A second tract of land (site number 622) with a building was acquired for $420,600. The closing statement indicated that the land value was $301,500 and the building value was $119,100. Shortly after acquisition, the building was demolished at a cost of $41,200. A new building was constructed for $331,100 plus the following costs.

Excavation fees $38,000

Architectural design fees 10,900

Building permit fee 2,500

Imputed interest on funds used during construction (stock financing) 8,400

The building was completed and occupied on September 30, 2017.

2. A third tract of land (site number 623) was acquired for $646,300 and was put on the market for resale.4.

During December 2017, costs of $89,100 were incurred to improve leased office space. The related lease will terminate on December 31, 2019, and is not expected to be renewed. (Hint: Leasehold improvements should be handled in the same manner as land improvements.)5.

A group of new machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machines was $86,600, freight costs were $3,200, installation costs were $2,400, and royalty payments for 2017 were $17,300.

(a) Calculate the balance at December 31, 2017 in each of the following balance sheet accounts. Disregard the related accumulated depreciation accounts.