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 clear and grade land purchased for a new plant. 2. Parking ticket fees incurred by the delivery truck that illegally parked when delivering new equipment. 3. Demolition costs to remove an old building on land purchased. 4. Janitorial costs incurred to clean equipment. 5. Repair costs to fix new equipment damaged by the crew that unpacked it. 6. Costs to lay foundation for a new building. 7. Costs to unpack and assemble new equipment. 8. Costs charged by a contractor to install new equipment into the production line. Category

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 clear and grade land purchased for a new plant. 2. Parking ticket fees incurred by the delivery truck that illegally parked when delivering new equipment. 3. Demolition costs to remove an old building on land purchased. 4. Janitorial costs incurred to clean equipment. 5. Repair costs to fix new equipment damaged by the crew that unpacked it. 6. Costs to lay foundation for a new building. 7. Costs to unpack and assemble new equipment. 8. Costs charged by a contractor to install new equipment into the production line. Category

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: As a natural resource asset is consumed, accountants record the cost of the asset using:…

A: Natural resource assets are tangible assets that are part of the earth's natural resources. Examples…

Q: For depreciation purposes, what would be the first cost of the new machine(depreciation base)?

A: Depreciation is the charge or expense to be accounted in the books against an asset of the…

Q: Depreciation is the process of allocating the cost of a plant asset to expense in the accounting…

A: Plant is purchases in the year of its purchase. But the benefit from the plant comes in later years…

Q: the VLN, expenditures after acquisition are either expensed or capitalized. The company spent money…

A: Expenditure made after acquisition of an asset can be treated as capital expenditure or revenue…

Q: Identify the various costs included in the initial cost of property, plant, and equipment, natural…

Q: Understand accounting issues related to acquiring and valuing plant assets.

A: Following are the accounting issues that are related to acquiring and valuing plant assets: a) Cash…

Q: The Land held for future investment will ppear in a classified statement of financial position in…

A: The assets of a company are classified as current assets and non-current assets. The non-current…

Q: GAAP regulations state that for each of the types of plant assets, a company must disclose the…

A: The Generally Accepted Accounting Principles (GAAP) are a set of rules, standards, and practices…

Q: Listed below are costs (or discounts) to purchase or construct new plant assets. (1) Indicate…

A: The question is related to identification of expenses which are of revenues nature and capital…

Q: Current Attempt in Progress Indicate whether each of the following expenditures should be classified…

A: An expenditure in accounting refers to any outflow of cash or other assets from a business entity,…

Q: Which of the following research and development costs should always be capitalized? a. costs of…

A: Research and development costs can be defined as the efforts of the company that are related to the…

Q: Discuss when a company in the extractive industries needs to start accounting for its restoration…

A: Answer : A company in the extractive industry start accounting for its restoration costs when there…

Q: Before testing property, plant, and equipment (PPE) and finite-life intangible (FLI) assets,…

A: The objective of the question is to understand the process a firm follows in assessing Property,…

Q: Determine the initial cost of property, plant, and equipment and intangible assets acquired in…

A: Property, Plant, and Equipment or PP&E is a classification shown on a balance sheet. It normally…

Q: In computing depreciation, salvage value is

A: Answer: Option d

Q: On February 1, 2019, Edwards Corporation purchased a parcel of land as a factory site for $120,000.…

A: General points - All the costs incurred in related to build a building should be capitalized to the…

Q: For each of the following long-lived assets, select its nature and the related cost allocation…

A: The company operates its business with current assets, intangible assets, fixed assets and other…

Q: Trinkle Company made several purchases of long-term assets during the year. The details of each…

A: Costs are classified as capital cost and operational cost. Cost which is capital in nature is added…

Q: The book value of a plant asset is equal to Select one: the fair value of the asset at the…

A: The book value of a plant asset is a term used in accounting to describe the net value of an asset.…

Q: The balance in the Accumulated Depreciatin account represents: A) The amount charged to expense in…

A: Assets are depreciated by companies and this allows the company to recover the cost of the asset…

Q: What is a portion of plant asset cost allocated as expense for the period? What is the difference…

A: Carrying Amount: The carrying amount is the purchase price less impairment and depreciation and is…

Q: Depreciation of property, plant and equipment is the process of Oasset valuation for statement of…

A: The Depreciation expense is charged on fixed assets as reduction in the value of the fixed assets…

Q: (LO 1) Additions to plant assets are: a. revenue expenditures. b. debited to the Maintenance and…

A: lant assets, also known as fixed assets, are long-term tangible assets that are used in the…

Q: Revenue expenditures: Multiple Choice Are additional costs of plant assets that do not materially…

A: A business has to deal with various types of transactions in its day to day operation. The…

Q: Explain how a company--subject to SEC and FASB reporting requirements--decides which costs to…

A: A plant asset is a long-term tangible asset used for productive purposes, such as manufacturing,…

Question

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 clear and grade land purchased for a new plant.
2. Parking ticket fees incurred by the delivery truck that illegally parked when delivering new equipment.
3. Demolition costs to remove an old building on land purchased.
4. Janitorial costs incurred to clean equipment.
5. Repair costs to fix new equipment damaged by the crew that unpacked it.
6. Costs to lay foundation for a new building.
7. Costs to unpack and assemble new equipment.
8. Costs charged by a contractor to install new equipment into the production line.
Category

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

What costs are included when capitalizing an asset on the balance sheet?

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Accounting for Property, Plant and Equipment

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Explain the appropriate accounting treatment required when a change is made in the service life or residual value of property, plant, and equipment and intangible assets.
Indicate whether each of the following expenditures should be classified as land, land improvements, buildings, equipment, or none of these. 1. 2. Parking lots Electricity used by a machine 3. Excavation costs 4. Interest on building construction loan 5. Cost of trial runs for machinery 6. Drainage costs 7. Cost to install a machine 8. Fences 9. Unpaid (past) property taxes assumed 10. Cost of tearing down a building when land and a building on it are purchased
Which of the following costs is not typically capitalized as part of an asset’s cost? A) initial testing costs B) Purchase price of a service contract for routine maintenance costs C) Costs of insurance during the construction period D) Transportation costs while the asset was in transit E) Installation costs
Revenue expenditures: Multiple Choice Are costs that do not materially increase a plant asset's life or capabilities. Extend the asset's useful life. Are debited to asset accounts when incurred. Substantially benefit future periods. Are known as balance sheet expenditures because they relate to plant assets.
What is the purpose of a depletion base? O to regulate the consumption of natural resources O to categorize natural resources for tax purposes O to determine a restoration goal for natural resources O to determine the cost of natural resources to be allocated
Several expenditures are listed below. Indicate whether or not each expenditure would be included in the cost of acquisition for each item below. The answer box provides two options, Yes (if the expenditure would be included ) or No, (if the expenditure would not be included.) Cost testing materials and labor in testing a purchased machine Yes before use Compensation for injury to No construction worker Cost of overhaul to a used Yes machine purchased before initial use Cost of tearing down a building Yes on newly acquired land Repairs to a new machine Yes damaged while moving it into > > > > >
Depreciation expense is the portion of a plant asset's cost that is allocated to expense for a period. True or False
The cost of supplies (materials) used to test new equipment would be debited to which of the following accounts? a. Buildings Ob. Land c. Land Improvements Od. Machinery and Equipment
Trinkle Company made several purchases of long-term assets during the year. The details of each purchase are presented here. New Office Equipment 1. List price: $42,600; terms: 2/10, n/30; paid within the discount period. 2. Transportation-in: $880. 3. Installation: $400. 4. Cost to repair damage during unloading: $630. 5. Routine maintenance cost after eight months: $150. Basket Purchase of Copier, Computer, and Scanner for $52,500 with Fair Market Values 1. Copier, $23,421. 2. Computer, $12,027. 3. Scanner, $27,852. Land for New Warehouse with an Old Building Torn Down 1. Purchase price, $83,800. 2. Demolition of building, $4,760. 3. Lumber sold from old building, $1,780. 4. Grading in preparation for new building, $7,900. 5. Construction of new building, $279,000.
Depreciation is the allocation of the cost of a plant asset over its useful life in a rational and systematic manner. The asset being depreciated remains at historical cost and the accumulated depreciation account serves as a contra account to lower the asset balance on the books. Question: Explain why this lowered value is, or is not, the market value of the asset in any given accounting period. Support your answer with examples explaining your choice.
The write-off of the cost of plant and equipment is called a.amortization. b.depletion. c.depreciation. d.deterioration
how to calculate additions to plant , property, and equipment