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Classification of Costs Associated with Assets the following account balances were included in Bromley Company's
During 2019, the following transactions occurred:
1.Land was acquired for $70,000 for a future building site. Commissions of $4,000 were paid to real estate agent.
2. A factory and land were acquired from Kent development company by issuing 20,000 shares of $3 par common stock. At that time, the stock. At that time, the stocl was selling for $10 per share on the New york stock exchange. The independently appraised values of the land and the factory were $60,000 and $180,000 respectively.
3.Equipment was acquired at a cost of $120,000. In addition, sales tax, freight costs, and installation costs were $7,000, $10,000 and $16,000, respectively. During installation, the equipment was damaged, and $2000 was spent for repairs.
4.A new parking lot was installed at a cost of $30,000.
5.Half the land purchased in Item 1 was prepared as a building site. Costs of $26,000 were incurred to clear the land, and the timber recovered was sold for $3,000. A new building was built for $60,000. Architect's fees relating to construction were $18,000 and imouted intrest on equity funds used during construction was $15,000. No debt is outstanding.
6.Costs of $20,000 were incurred to improve some leased office space. The lease will terminate in 2021 and is not expected to be renewed.
7. A group of new machines was purchased under royalty agreement that provides for payment of annual royalties based on units produced. The invoice price of the machines was $30,000, Freight costs were $2,000, and royalty payments for 2019 were $12,000.
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