Chapter 10, Problem 3P

To determine

Costs of acquisition: Any cost incurred to acquire the asset and to bring the asset to use is capitalized; e.g., Purchase price of the asset, installation charges of machinery, freight charges, razing of old building, draining the land in case of Land are capitalized. In other words, any cost incurred before putting the asset to use is capitalized. However, subsequent to acquisition, any expense which would increase the useful life of the asset or enhance the quality and quantity of output, are also capitalized, e.g., an overhaul of machinery.

(a)

To prepare: To prepare journal entries.

To determine

To determine and present:

(b) land, buildings, and depreciation on the balance sheet at December 31, 2018.