1. Joe mason acquired land on which he will construct a new restaurant. A chemical plan had once occupied the site. Government regulations require Mason to clean up the chemical residue before building. The cost of clean-up is material.

Required:

1. Under GAAP, an asset is charged with historical cost, which includes the purchase price and all costs incident to getting the asset ready for its intended use. Defend the historical cost principles. Use the conceptual framework concepts and definitions in your defense.
2. How should Joe treat the ost of clean-up? Is it land cost, a building cost? explain