User Account

All Pages

Determine which costs are to be included for the land

Assignment Help Financial Accounting
Reference no: EM132616217

Franks Logistics Ltd is constructing a new warehouse facility in western Sydney near the proposed second airport and adjacent to the M7 freeway. The purchase of the land occurred and warehouse construction commenced on 1 July 2016. It was ready for use on 31 May 2017, and operations commenced on 30 June 2017. Franks incurs a many costs in building the warehouse and it needs to determine those that should be recognised in the cost of the warehouse on initial recognition.

These costs include:

Purchase cost of land                                                                        $10,000,000

Legal fees on acquisition                                                                          $50,000

Stamp duty                                                                                          $750,000

Auction fees paid by the vendor                                                                 $40,000

Demolition of existing structure                                                                   $500,000

Bribe paid to local council official for recommending rezoning on1 June 2016          $25,000

Cost of CEO salary for time taken to find site                                                   $60,000

Contract payments for the construction of the warehouse (fixed price)            $20,000,000

Contract payments for construction of the warehouse (variations)                   $2,000,000

Fines paid for Workcover (OH&S) breaches on the site                                        $37,500

Interest on $10m loan to purchase the land                                                $1,200,000

Landscaping of area surrounding warehouse                                                     $90,000

Replanting of trees (landscaping) damaged by street races                                   $10,000

Purchase of e-tags for trucks                                                                       $100,000

Local Government / Council rates for the year                                                  $60,000

Required

Problem 1: Determine which costs are to be included for the land and warehouse

Reference no: EM132616217

Questions Cloud

Name three advantages of a sole proprietorship : In a General Partnership how are profits and losses shared if there isn't a written agreement? Name three advantages of a Sole Proprietorship
Do think that capital gains should be taxed : Do you think that Capital Gains should be taxed the same as Ordinary Income? Explain in detail. What is Ordinary Income meant? provide the example.
Find the annual effective rate of discount : Find the annual effective rate of discount at which a payment of $300 immediately and $500 one year from today will accumulates to $1100 two years
Calculate the average rate of return for the project : Zenello Company Limited intends to set up a shoe, Calculate the Average Rate of Return for the project and advise on whether the project should be taken on.
Determine which costs are to be included for the land : Determine which costs are to be included for the land and warehouse. Franks Logistics Ltd is constructing a new warehouse facility in western Sydney
Evaluate business problems related to Web design : Apply web related programming skills to develop web based systems for a particular business scenario and Understand and evaluate business problems
What is the depreciation using declining balance method : Useful life of 4 years. It is determined that the fourth root of .10 is .5623. What is the depreciation for 2020 using declining balance method?
How do we increase the efficiency of the healthcare system : How do we increase the efficiency of the healthcare system? How would you as a healthcare executive or policymaker increase the efficiency of the U.S.
Find what is the depreciation using sum of years digits : Disposal in four and one half years of P70,000 and the disposal cost will be P10,000. What is the depreciation for 2020 using sum of years' digits?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine what minimum line of credit to request from lender

Find What is the minimum line of credit to request from a lender? Do you think you are a good candidate for the line of credit? Why?

  Discuss whether hazel behaving in a professional manner

Hazel and Cedric feel that investors would be more willing to invest in the company if they received a large quantity of shares for what might appear to be a obargain?? price.

  Compute profitability per pound under abc system at lehigh

Compute the profitability per pound under the ABC system at Lehigh. For each of the five sample products, compute the profitability per pound per unit of the constraint under the TOC approach implemented at Lehigh.

  Annual report in fundamentals of financial accounting

Does managements assessment of the financial condition agree with your assessment from the Financial Statements Paper Part I? Explain your response.

  Explain what can do as a leader to assure project team

Explain what you can do as a leader to assure your project team that this is the right thing to do. What will you do to motivate them?

  What should be nominal rate of return of nick investment

What should be the nominal rate of return of Nick's investment product? Nick is a product manager in an investment baking firms.

  Annual premium on a policy providing coverage

The equipment has an estimated life of 10 years, no residual value, and the double declining balance method is used for calculating depreciation.

  Perform a free cash flow valuation of prefab

Critically discuss whether or not it is in the best interests of PreFab (Pty) Ltd to have a transfer pricing arrangement whereby the Rental division acquires prefabricated units from the Manufacturing division at the same price that units are sold..

  Net bond liability balance

Auerbach Inc. issued 4% bonds on October 1, 2016. The bonds have a maturity date of September 30, 2026 and a face value of $300 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2017. The effective interest rate esta..

  Prepare record the two journal entries cmk would make

Prepare Record the two journal entries CMK would make at the time of sale. Sold $60,000 of inventory to VNN, Inc. for $90,000 at 2/10, net 30.

  The amount of interest payable

Several years ago, the City of Russell issued $7 million of 6 percent serial bonds at 101. Principal payments of $350,000 are due each June 30 for 20 years. The amount of interest payable (assuming an outstanding balance of $4,000,000 of bonds) that ..

  Calculate hourly rate and overtime rates

Note: For this edition, the 2014 federal income tax tables, FICA rates, OASDI rate of 6.2% on wages up to $117,000 and the employee and employer HI rate of 1.45% on all wages was used. Unless instructed otherwise, click here to calculate hourly rate ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd