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Hi,
I am creating chart of accounts for a construction company which buys lands, make building then sell them as apartments, I have the below transactions and questions about them which simplify our scenarios. Could you provide me with answers?
1- Owner decided to invest 3 Million $ in his construction company. To record this this transaction, he debits the cash in bank account by $3,000000 and credits his equity account by the same amount.
2- The owner bought a land, it costs 1 million$. To record this, he credited the cash in bank account by $1,000000 and debited the cost account that designed to record lands. Can we make this cost account COGS?
3- He paid $1,00000 to complete the first stage of the construction process which is digging, paving and fencing. To record this, he debited the asset account called "Land Improvements" by $1,00000 and what account should he credit it by the same amount?
4- He paid $5,0000 to construct the lower level (which is going to be apartment 1). To record this, what accounts should he credit it and debit it?
5- He paid $5,0000 to construct the ground level (which is going to be apartment 2 and 3). To record this, what accounts should he credit it and debit it?
6- He received a customer request to buy apartment 1, the price of the apartment is $3,00000, the customer will pay with checks due on 5/5/2017. To record this, he debited account receivable by $3,00000 and what accounts should he credit it by the same amount?
Regards
Mohamed
I am creating chart of accounts for a construction company which buys lands, make building then sell them as apartments, I have the below transactions and questions about them which simplify our scenarios. Could you provide me with answers?
1- Owner decided to invest 3 Million $ in his construction company. To record this this transaction, he debits the cash in bank account by $3,000000 and credits his equity account by the same amount.
2- The owner bought a land, it costs 1 million$. To record this, he credited the cash in bank account by $1,000000 and debited the cost account that designed to record lands. Can we make this cost account COGS?
3- He paid $1,00000 to complete the first stage of the construction process which is digging, paving and fencing. To record this, he debited the asset account called "Land Improvements" by $1,00000 and what account should he credit it by the same amount?
4- He paid $5,0000 to construct the lower level (which is going to be apartment 1). To record this, what accounts should he credit it and debit it?
5- He paid $5,0000 to construct the ground level (which is going to be apartment 2 and 3). To record this, what accounts should he credit it and debit it?
6- He received a customer request to buy apartment 1, the price of the apartment is $3,00000, the customer will pay with checks due on 5/5/2017. To record this, he debited account receivable by $3,00000 and what accounts should he credit it by the same amount?
Regards
Mohamed