FUND.ACCT.PRIN.
25th Edition
ISBN: 9781260247985
Author: Wild
Publisher: RENT MCG
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Textbook Question
Chapter 10, Problem 2QS
Assigning costs to plant assets C1 Q
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
Expensed or Asset
Capitalized Category
_ _ 1. Wages paid to train employees to use new equipment.
_ _ 2. Invoice cost paid for new equipment,
_ _ 3. Early payment discount taken on the purchase of new equipment.
_ _ 4. Realtor commissions incurred on land purchased.
_ _ 5. Property taxes on land incurred after it was purchased,
_ _ 6. Costs of oil for the truck used to deliver new equipment.
_ _ 7. Costs to lay foundation for a new building.
_ _ 8. Insurance on a new building during its construction.
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Plant Asset Cost
Listed below are certain costs (or discounts) incurred in the purchase or
construction of 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 included in plant assets,
indicate in which category of plant assets (Equipment, Building, or Land) the
related costs should be recorded on the balance sheet.
Expensed or
Capitalized
Asset
Category
1. Charges incurred to train employees to use new equipment
2. Invoice cost to purchase new equipment
3. Deduction for an early payment discount taken on the purchase of
new equipment
4. Real estate commissions incurred on land purchased for a new plant
5. Property taxes on land incurred after it was purchased
6. Costs of tune-up for the truck used to deliver new equipment
7. Costs to lay the foundation for a new building
8. Insurance on a new building during the construction phase
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
Trinkle Company made several purchases of long-term assets during the year. The details of each purchase are presented her
New Office Equipment
1. List price: $40,300; terms: 2/10, n/30, paid within the discount period.
2. Transportation-in: $740.
3. Installation: $470.
4. Cost to repair damage during unloading: $661.
5. Routine maintenance cost after eight months: $110.
Basket Purchase of Copier, Computer, and Scanner for $50,100 with Fair Market Values
1. Copier, $23,556.
2. Computer, $11,476.
3. Scanner, $25,368.
Land for New Warehouse with an Old Building Torn Down
1. Purchase price, $81,200.
2. Demolition of building, $5.200.
3. Lumber sold from old building, $2,440.
4. Grading in preparation for new building, $9.200.
5. Construction of new bullding, $231,000.
Required
In each of these cases, determine the amount of cost to be capitalized in the asset accounts.
nete
Total
Chapter 10 Solutions
FUND.ACCT.PRIN.
Ch. 10 - Cost of plant assets C1 Kegler Bowling installs...Ch. 10 - Assigning costs to plant assets C1 Q Listed below...Ch. 10 - Prob. 3QSCh. 10 - Straight-line depreciation P1 On January 1= the...Ch. 10 - QS 10-' Units-of-production depreciation
On...Ch. 10 - QS10-5 Double-declining-balance method P1
A...Ch. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Prob. 9QSCh. 10 - Prob. 10QS
Ch. 10 - Prob. 11QSCh. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 15QSCh. 10 - Prob. 16QSCh. 10 - Prob. 17QSCh. 10 - Prob. 18QSCh. 10 - Prob. 19QSCh. 10 - Prob. 20QSCh. 10 - Prob. 21QSCh. 10 - Prob. 22QSCh. 10 - Exercise 10-1 Cost of plant assets C1 Q Rizio Co....Ch. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Exercise 104 Straight-line depreciation P1 Ramirez...Ch. 10 - Exercise 10-5 Units-of-production depreciation P1...Ch. 10 - Exercise 10-6
Double-declining-balance...Ch. 10 - Exercise 10-7 Straight-line depreciation P1
New...Ch. 10 - Exercise 10-8 Double-declining-balance...Ch. 10 - Exercise 10-9 Straight-line depreciation and...Ch. 10 - Exercise 10-10
Double-declining-balance...Ch. 10 - Exercise 10-11 Straight-line, partial-year...Ch. 10 - Exercise 10-12 Dauble-declining-balance....Ch. 10 - Exercise 10-13
Revising depreciation
C2
Apex...Ch. 10 - Exercise 10-14 Ordinary repairs, extraordinary...Ch. 10 - Exercise 10.15 Extraordinary repairs; plant asset...Ch. 10 - Exercise 10-16 Disposal of assets P2 Diaz Company...Ch. 10 - Exercise 10-17 Partial-year depreciation: disposal...Ch. 10 - Exercise 10-18 Depletion of natural resources P3...Ch. 10 - Exercise 10-19 Amortization of intangible assets...Ch. 10 - Exercise 10-20 Goodwill P4 Robinson Company...Ch. 10 - Exercise 10-21 Preparing a balance sheet P1 P3...Ch. 10 - Exercise 10-22 Evaluating efficient use of assets...Ch. 10 - Exercise 10-23A Exchanging assets P5
Gilly...Ch. 10 - Prob. 24ECh. 10 - Prob. 25ECh. 10 - Prob. 26ECh. 10 - Problem 10-1A Plant asset costs; depreciation...Ch. 10 - Problem 1O-2A Depreciation methods P1 A machine...Ch. 10 - Problem 10-3A Asset cost allocation; straight-line...Ch. 10 - Problem 10-4A
Computing and revising depreciation;...Ch. 10 - Problem 10-5A Computing and revising depreciation;...Ch. 10 - Problem 1O-6A
Disposal of plant assets
C1 P1...Ch. 10 - Problem 1O7A
Natural resources
P3
On July 23 of...Ch. 10 - Problem 10-1B Plant asset costs; depreciation...Ch. 10 - Problem 10-28 Depreciation methods P1 On January...Ch. 10 - Problem 10-3B Asset cost allocation; straight-line...Ch. 10 - Prob. 4PSBCh. 10 - Problem 10-5B Computing and revising...Ch. 10 - Problem 1O-6B
Disposal of plant assets
C1 P1 P2
On...Ch. 10 - Prob. 7PSBCh. 10 - Prob. 10SPCh. 10 - Prob. 1AACh. 10 - Prob. 2AACh. 10 - Prob. 3AACh. 10 - Prob. 1DQCh. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQCh. 10 - Prob. 11DQCh. 10 - Prob. 12DQCh. 10 - Prob. 13DQCh. 10 - Prob. 14DQCh. 10 - Prob. 15DQCh. 10 - Prob. 16DQCh. 10 - Prob. 1BTNCh. 10 - Prob. 2BTNCh. 10 - Prob. 3BTNCh. 10 - Prob. 4BTN
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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
- 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.arrow_forwardCost 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 IIIarrow_forwardListed 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 install necessary lighting in a new building. 2. Costs to clear and grade land purchased for a new plant. 3. Costs to lay foundation for a new building. 4. Construction costs for a new building to be used in operations. 5. Costs charged by a contractor to install new equipment into the production line. 6. Fees to perform necessary tests of new equipment. 7. Costs to pay a crew to test new equipment for a day to ensure it was working properly. 8. Sales tax on new equipment purchased.arrow_forward
- What is the general rule for cost inclusion for plant assets?arrow_forwardTrinkle 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.arrow_forwardWhich of the following costs incurred internally to create an intangible asset is generallyexpensed? a. Research and development costs.b. Filing costs.c. Legal costs.d. All of the above.arrow_forward
- Identify the various costs included in the initial cost of property, plant, and equipment, natural resources, and intangible assets.arrow_forwardWhat is the criterion a company uses to decide whether to include an expenditure in the cost of property, plant,and equipment rather than expensing it? Give an example of the types of expenditures that are included in the cost of property, plant and equipment as a result of the application of this criterionarrow_forwardWhat is the process of allocating the cost of a plant asset over its useful life called?arrow_forward
- Depreciation of property, plant and equipment is the process of asset valuation for statement of financial position purposes asset valuation based on current replacement cost data allocation of the asset's cost over its useful life fund accumulation for the replacement of the assetarrow_forwardResearch and development costs a. Are recorded as research and development assets. b. Are capitalized and then amortized. c. Should be included in the cost of the patent they relate to. d. Should be expensed.arrow_forwardWhat is a portion of plant asset cost allocated as expense for the period? What is the difference between the plant asset cost and the related accumulated depreciation?arrow_forward
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