Cimi Manufacturing had the following transactions related to the purchase of long-term assets. During 2025, purchased land for $380,000 with plans to build a new facility. The company pays $23,500 to demolish a building that was on the land and an additional $17,000 to grade the land in preparation for the new building. Construction cost of the new building was $$2,100,000. The parking lot and related lighting cost $41,000. Cimi's employee wages during this time of construction were $214,000. On Nov 5, 2025, Cimi purchased machinery to be install in the new facility. the machine had a price of $28,000 with term 2/10, n/30, and FOB shipping point. Cimi always pays within the discount period. Transporation cost of $680 wer paid. Additionally, the following costs related to installation of the machine were incurred: installation cost $7,600 of which $5,000 of this was parts, testing costs of $900. During installation, damage to a neighboring company's warehouse occured, costing Cimi $1,300 in repairs. On Dec 1, 2025, Cimi paid $390,000 for a building, land, and machinery. The appraised value of the building is $260,000, of the land is $80,000 and the machinery is $60,000. Requirements: Determine the costs that should be recorded under Land, Building, Land Improvements, Equipment or expensed. Record the transactions in the general journal.
Cimi Manufacturing had the following transactions related to the purchase of long-term assets.
During 2025, purchased land for $380,000 with plans to build a new facility. The company pays $23,500 to demolish a building that was on the land and an additional $17,000 to grade the land in preparation for the new building. Construction cost of the new building was $$2,100,000. The parking lot and related lighting cost $41,000. Cimi's employee wages during this time of construction were $214,000.
On Nov 5, 2025, Cimi purchased machinery to be install in the new facility. the machine had a price of $28,000 with term 2/10, n/30, and FOB shipping point. Cimi always pays within the discount period. Transporation cost of $680 wer paid. Additionally, the following costs related to installation of the machine were incurred: installation cost $7,600 of which $5,000 of this was parts, testing costs of $900. During installation, damage to a neighboring company's warehouse occured, costing Cimi $1,300 in repairs.
On Dec 1, 2025, Cimi paid $390,000 for a building, land, and machinery. The appraised value of the building is $260,000, of the land is $80,000 and the machinery is $60,000.
Requirements:
- Determine the costs that should be recorded under Land, Building, Land Improvements, Equipment or expensed.
- Record the transactions in the general journal.
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