scounts) to purchase or1) Indicate whether the costsalized (Meaning they areant assets on the balanceuld be capitalized, indicate ints (Equipment, Building, orId be recorded on the balanceListCategoryuilding.a new plant.ised in operations.equipment into the production line.ipment.or a day to ensure it was working properly. Listed below are costs (or discounts) to purchase orconstruct new plant assets. (1) Indicate whether the costsshould be expensed or capitalized (Meaning they areincluded in the cost of the plant assets on the balancesheet.) (2) For costs that should be capitalized, indicate inwhich category of plant assets (Equipment, Building, orLand) the related costs should be recorded on the balancesheet.List1. Costs to install necessary lighting in a new building.2. Costs to clear and grade land purchased for a new plant.3. Costs to lay foundation for a new building.4. Construction costs for a new building to be used in operations.5. Costs charged by a contractor to install new equipment into the production line.6. Fees to perform necessary tests of new equipment.7. Costs to pay a crew to test new equipment for a day to ensure it was working properly.8. Sales tax on new equipment purchased.

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1. Costs to install necessary lighting in a new building. 2. Costs to clear and grade land purchased for a new plant. 3. Costs to lay foundation for a new building. 4. Construction costs for a new building to be used in operations. 5. Costs charged by a contractor to install new equipment into the production line. 6. Fees to perform necessary tests of new equipment. 7. Costs to pay a crew to test new equipment for a day to ensure it was working properly. 8. Sales tax on new equipment purchased.

1. Costs to install necessary lighting in a new building. 2. Costs to clear and grade land purchased for a new plant. 3. Costs to lay foundation for a new building. 4. Construction costs for a new building to be used in operations. 5. Costs charged by a contractor to install new equipment into the production line. 6. Fees to perform necessary tests of new equipment. 7. Costs to pay a crew to test new equipment for a day to ensure it was working properly. 8. Sales tax on new equipment purchased.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

100%

scounts) to purchase or
1) Indicate whether the costs
alized (Meaning they are
ant assets on the balance
uld be capitalized, indicate in
ts (Equipment, Building, or
Id be recorded on the balance
List
Category
uilding.
a new plant.
ised in operations.
equipment into the production line.
ipment.
or a day to ensure it was working properly.

Listed below are costs (or discounts) to purchase or
construct new plant assets. (1) Indicate whether the costs
should be expensed or capitalized (Meaning they are
included in the cost of the plant assets on the balance
sheet.) (2) For costs that should be capitalized, indicate in
which category of plant assets (Equipment, Building, or
Land) the related costs should be recorded on the balance
sheet.
List
1. Costs to install necessary lighting in a new building.
2. Costs to clear and grade land purchased for a new plant.
3. Costs to lay foundation for a new building.
4. Construction costs for a new building to be used in operations.
5. Costs charged by a contractor to install new equipment into the production line.
6. Fees to perform necessary tests of new equipment.
7. Costs to pay a crew to test new equipment for a day to ensure it was working properly.
8. Sales tax on new equipment purchased.

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