C 8c M Securities made several expenditures during the current fiscal year, including the following: Required: a.
Question:
Required:
a. For each of the items listed above, indicate whether the cost should be debited to land, land improvements, buildings, equipment, or an expense account.
b. For each item that was expensed, explain why it was not appropriate to add the amount to an asset.
Transcribed Image Text:
Amount Description of Espenditure 1 50,000 Acquisition of a piece of land to be used as a building site 2. 3,000 Demolition ol a small building on the land, to make way for the new building . 7,500 evelling of the land to prepare it for construction of the new building 4 10,000 Sty at the building site during the construction period 24,000 Insurance on the new building, including $10,000 for the time that it was under construction and $14,000 for the remainder of the year 6. 290,000 Construction of the new building 7 12.000 Paing ol a parking lot beside the building 6,000 Decorative landscaping around the building (planting flowers, ornamental 9. I0. TE, shrubs, ete.) Purchase of a new piece of equipment Sales Laxes on the new equipment Installation of the new cquipment 80,000 6,000 3,000 2,000 Repairs to the new equipment, which was damaged during installation 13. 500 Testing and adjustment of the new equipment prior to its use 4 000 Minor repairs to some old equipment 15 7.000 Major overhaul of an old piece of equipment, extending its useful life by three years 16 1.200 Routine maintenance of equipment 7 2,000 Replacement of windows broken by disgruntled employees during a labour dispute
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a 1 Land 2 Land 3 Land 4 Either an Expense or the Building account would be acceptable 5 Either 1000...View the full answer
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Related Book For
Financial Accounting A User Perspective
ISBN: 978-0470676608
6th Canadian Edition
Authors: Robert E Hoskin, Maureen R Fizzell, Donald C Cherry
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