Identify those that should be included in the cost of the asset. (a) Freight charges, (b) sales tax on the machine, (c) payment to a passing motorist whose car was damaged by the equipment used in unloading the machine, (d) wages of employees for time spent in installing and testing the machine before it was placed in service, (e) wages of employees assigned to lubricate and make minor adjustments to the machine one year after it was placed in service

Identify those that should be included in the cost of the asset. (a) Freight charges, (b) sales tax on the machine, (c) payment to a passing motorist whose car was damaged by the equipment used in unloading the machine, (d) wages of employees for time spent in installing and testing the machine before it was placed in service, (e) wages of employees assigned to lubricate and make minor adjustments to the machine one year after it was placed in service

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 19E

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Question

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The following expenditures were incurred in connection with a new machine acquired by a metals manufacturing company.
Identify those that should be included in the cost of the asset.
(a) Freight charges, (b) sales tax on the machine, (c) payment to a passing motorist whose
car was damaged by the equipment used in unloading the machine, (d) wages of employees for time spent in installing and testing the machine before it was placed in service, (e) wages of employees assigned to lubricate and make
minor adjustments to the machine one year after it was placed in service

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