All of the following costs associated with acquiring a building should be capitalized except
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All of the following costs associated with acquiring a building should be capitalized except
a. The costs of buildings permits
b. The cost of a strike associated with the construction of the building
c. the contract price
d. the costs of excavation for the building
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- Merchant Company purchased property for a building site. The costs associated with the property were: What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?Which of the following are the capitalized costs of the land and the new building respectivelyUnder IFRS, what cost is specifically excluded from being capitalized as part of the cost of an investment property? Question 7 options: a) Delivery of materials needed for construction of an investment property. b) Standard wasted material costs incurred in the construction of an investment property. c) Losses incurred after construction is complete and before the property is fully occupied. d) Replacement of a key component of the investment property with more environmentally friendly parts.
- When a company purchases land with a building on it and immediately tears down thebuilding so that the land can be used for the construction of a plant, the costs incurredto tear down the building should be:a. expensed as incurredb. added to the cost of the plantc. added to the cost of the landd. amortized over the estimated time period between the tearing down of thebuilding and the completion of the planWhich of the following is NOT a capital expenditure? Fire insurance premium on a new building Architect's fees for a new building Expenditure incurred in the construction of parking space for staff Costs incurred in transporting newly purchases machineryWhich of the following costs are capitalized when purchasing a piece of equipment? a. The invoiced price of the equipment b. Sales taxes c. All installation costs related to the equipment d. All of the above
- Which cost is not recorded as part of the cost of a building? a. Real estate commission paid to buy the building b. Construction materials and labor c. Concrete for the building’s foundation d. Annual building maintenanceWhen an entity acquires land with a building on it and immediately tears down the building so that the land can be used for the construction of a plant, the cost incurred to tear down the building shall be a. Expensed as incurred b. Amortized over the estimated time period between the tearing down of the building and the completion of the plant c. Added to the cost of the building d. Added to the cost of the landUnder IFRS, the costs of relocating property, plant, and equipment can be capitalized as assets and depreciated over the period of expected benefit. True False
- Which of the following should form part of the cost of investment property?I. Legal fees and transfer taxes directly attributable to acquisitionII. Fair value of shares issued by the company to acquire the propertyIII. Abnormal amounts of wasted material, labor or other resources incurred in developing the propertyIV. Renovation costs on the building to be held to earn rentals a. I, II, III and IV b. I, III and IV c. I, II, and IV d. I and II onlyCost includes all costs necessary to bring the asset to a working condition for its intended use. Which of these costs are taken as a part of cost of assets? I. Invoice price II. Transportation cost III. Installation charges I and II II and III I, II and III I and IIIHow much is the new building? under the section of property, plant and equipment, how much should be reported as the total cost of land show solution