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Marianna [84]
3 years ago
15

On July 1, 2018, Larkin Co. purchased a $400,000 tract of land that is intended to be the site of a new office complex. Larkin i

ncurred additional costs and realized salvage proceeds during 2018 as follows:Demolition of existing building on site $75,000Legal and other fees to close escrow 12,000Proceeds from sale of demolition scrap 10,000What would be the balance in the land account as of December 31, 2018?a. $400,000.b. $475,000.c. $477,000.d. $487,000
Business
1 answer:
jeka57 [31]3 years ago
3 0

Answer:C. $477,000

Explanation:

Asset are initially recognized at price and other attributable cost. The cost includes tax paid on the assets e.g Vat, legal cost for attorney, delivery, installation, site preparation, professional fees e.g Architect. All income earned from testing the asset or incidental to the asset installation are deducted to arrive at a final cost value.

In the above scenario the price of the land $400,000 is added to demolition cost $75,000, plus the legal fees of $12,000 are all added to $487,000 and the proceed of $10,000 from sales of demolition scrap will be deducted to have a final cost of $477,000.

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Explanation:

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The same is relevant

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3 years ago
Green Grocer and Futurity Farms enter into an agreement whereby Futurity will supply Green Grocer with 200 dozen eggs every two
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Customers must see value in a product or service before they are willing to exchange time or money to obtain it, but not all cus
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6 0
2 years ago
A company is deciding if it should design an advertising system for use on Twitter©. The first option is to skip out on designin
Vladimir79 [104]

Answer:

SYSTEM A

Explanation:

Given the following :

First option :

Skip design = No net gain or loss

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Additional sales of $50,000 under good condition

Additional sales of $10,000 under bad condition

System B:

Increase sale by $20,000 under both good and bad condition

Cost of system development = $25,000

Good condition are twice as likely to occur as bad condition

Hence, we have : good, good, bad

Probability of good = 2/3 = 0.667

Probability of bad = 1/3 = 0.333

We can calculate the Expected monetary Value of the three options :

First option:

Skip design : Expected monetary Value = $0

Second option (SYSTEM A) :

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Additional sales - system cost = ($50,000 - $25,000) =$25, 000

Loss from bad condition :

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From the expected monetary value obtained for the three options, System A is the best option with $11,680

4 0
3 years ago
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