C & 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, buildings, equipment, land improvements, 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:
S150,000 Acquisition of a piece of land to be used as a building site 3,000 Demolition of a small building on the land, to make way for the new building 7,500 Levelling of the land to prepare it for construction of the new building 290,000 Cction of the new huilding 12,000 Paing of a parking lot beside the building 6,000 Addition of decorative landscaping around the buildin(such as planting flowers and ornamental shrubs) Purchase of a new piece of equipment 80,000 6,000 Sales taxes on the new equipment 3,000 Installation of the new equipment 500 Testing and adjustment of the new equipment prior to its use L,000 Minor repairs to some old equipment 7,000 Majoroverhaul of an old piece of equipment, extending its useful life by three years 1200 Routine maintenance of equipment 2,000 Replacement of windows broken by disgruntled employees during a labour dispute
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Related Book For
Understanding Financial Accounting
ISBN: 978-1118849385
1st Canadian Edition
Authors: Christopher Burnley, Robert Hoskin, Maureen Fizzell, Donald
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