Cala Manufacturing purchases a large lot on which an old bulding is located as p

Question

Cala Manufacturing purchases a large lot on which an old bulding is located as part of ts plans to build a new plant. The negotiated purchase price is $280,000 for the lot plus $10,000 for the old building. The company pays $33,500 to tear down the old building and $47000 to fill and level the lot. It also pays a total of building and $87,800 for lighting and paving a parking area next to the building $1,540,000 in construction costs-this amount consists of $1,452.200 for the nevw Prepare a single journal entry to record these costs Incurred by Cala,all of which are paid in cash. View transaction list Journal entry worksheet Record the total costs of the plant assets Note: Enter debits before credits. Record entry Clear entry Vlew general Journal

Explanation / Answer

Journal entry: Land Account Dr. (280000+110000+33500+47000) 470500 Building Account Dr. 1452200 Land improvements Dr. 87800       Cash account 2010500.00

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