Assume Pancake House, Inc., opened an office in Cocoa Beach, Florida. Further assume that Pancake…

Assume Pancake House, Inc., opened an office in Cocoa Beach, Florida. Further assume that Pancake House incurred the following costs in acquiring land, making land improvements, and constructing and furnishing the new sales building: a. Purchase price of land, including an old building that will be used for a garage (land market value is $330,000; building market value is $70,000)………………………………………………………………………. $375,000b. Landscaping (additional dirt and earth moving)……………………………….. 8,000c. Fence around the land………………………………………………………………….. 35,300d. Attorney fee for title search on the land………………………………………….. 600e. Delinquent real estate taxes on the land to be paid by Pancake House…… 5,200f. Company signs at entrance to the property……………………………………… 1,700g. Building permit for the sales building……………………………………………… 670h. Architect fee for the design of the sales building…………………………….. 19,400i. Masonry, carpentry, and roofing of the sales building…………………….. 512,000j. Renovation of the garage building………………………………………………….. 41,500k. Interest cost on construction loan for sales building………………………….. 9,700l. Landscaping (trees and shrubs)……………………………………………………… 6,100m. Parking lot and concrete walks on the property……………………………… 52,300n. Lights for the parking lot and walkways……………………………………….. 7,200 o. Salary of construction supervisor (83% to sales building; 10% to land improvements; and 7% to garage building renovations)……….. 42,000p. Office furniture for the sales building……………………………………………. 83,000q. Transportation and installation of furniture…………………………………….. 1,400Assume Pancake House depreciates buildings over 40 years, land improvements over 25 years, and furniture over 10 years, all on a straight-line basis with zero residual value.Requirements1. Show how to account for each of Pancake House’s costs by listing the cost under the correct account. Determine the total cost of each asset.2. All construction was complete and the assets were placed in service on July 2. Record depreciation for the year ended December 31. Round to the nearest dollar.3. How will what you learned in this problem help you manage a business?View Solution:
Assume Pancake House Inc opened an office in Cocoa Beach