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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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.
Transcribed Image Text: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.
Transcribed Image Text: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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