ExercisesE9.1 (LO 1), AP Writing The following expenditures relating to plantassets were made by Glenn Company during the first 2 months of 2022.Determine cost of plant acquisitions.1. Paid $7,000 of accrued taxes at the time the plant site was acquired.2. Paid $200 insurance to cover a possible accident loss on new factorymachinery while the machinery was in transit.3. Paid $850 sales taxes on a new delivery truck.4. Paid $21,000 for parking lots and driveways on the new plant site.5. Paid $250 to have the company name and slogan painted on the newdelivery truck.6. Paid $8,000 for installation of new factory machinery.7. Paid $900 for a 2-year accident insurance policy on the new deliverytruck.8. Paid $75 motor vehicle license fee on the new truck. Instructionsa. Explain the application of the historical cost principle in determiningthe acquisition cost of plant assets.b. List the numbers of the transactions, and opposite each indicate theaccount title to which each expenditure should be debited.6.11

Introduction:-Property, plant ,equipment classified as fixed assets.It is reported under balance…

Instructions a. Explain the application of the historical cost principle in determining the acquisition cost of plant assets. b. List the numbers of the transactions, and opposite each indicate the account title to which each expenditure should be debited. 11

Instructions a. Explain the application of the historical cost principle in determining the acquisition cost of plant assets. b. List the numbers of the transactions, and opposite each indicate the account title to which each expenditure should be debited. 11

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Question

Exercises
E9.1 (LO 1), AP Writing The following expenditures relating to plant
assets were made by Glenn Company during the first 2 months of 2022.
Determine cost of plant acquisitions.
1. Paid $7,000 of accrued taxes at the time the plant site was acquired.
2. Paid $200 insurance to cover a possible accident loss on new factory
machinery while the machinery was in transit.
3. Paid $850 sales taxes on a new delivery truck.
4. Paid $21,000 for parking lots and driveways on the new plant site.
5. Paid $250 to have the company name and slogan painted on the new
delivery truck.
6. Paid $8,000 for installation of new factory machinery.
7. Paid $900 for a 2-year accident insurance policy on the new delivery
truck.
8. Paid $75 motor vehicle license fee on the new truck.

Instructions
a. Explain the application of the historical cost principle in determining
the acquisition cost of plant assets.
b. List the numbers of the transactions, and opposite each indicate the
account title to which each expenditure should be debited.
6.11

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