House Builders of Canada decided to expand its facilities and upgrade some of its log preparation equipment.
Question:
Required:
a. Determine the costs that should be capitalized as assets by Home Builders of Canada in its land, buildings, and equipment accounts.
b. State what should be done with any of the costs that are not capitalized.
Transcribed Image Text:
Date Amount Description of Expenditure Purchased land adjacent to the company's existing property, to he used for the expansion Jan. 2 75,000 ,200 Paid leal fees and deed registration fees. 4,000 Paid its workers to clear the land on their days off. 15 17 20 120,000 Purchased equipment, which was delivered but not yet paid for. 900 Purchased building permit for construction of the addition 2.500 Constructed temporary fencing as required by the building permit to enclose the construc- tion site. Upon completion of the addition to the building, the fencing was to be removed. Started construction of a new addition to the main building, which is estimated to cost $400,000 Received bill for delivery of the equipment that was received onJanuary 15 Paid the amounts owing on the equipment and its delivery. 22 400,000 25 Feb. 1 3,500 28 1,000 Paid architect's fees for designing the building addition and supervising its construction. May 9 380,000 Pil amount to the construction company upon completion of the building. 800 2,500 1.200 700 200 Paid cost to remove temporary fencing. Paid work crews to install the equipment. Paid for party to celebrate the successful completion of the expansion. Paid for set-up and adjustment of the new equipment so it would be ready to use. Paid for an ad in the local paper to advertise that the company was hiring. 14 24 June 7 I0
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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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