Question 1: Property Plant and Equipment (28 marks) McCoy Inc., a publicly accountable company, has purchased...

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Question 1: Property Plant and Equipment (28 marks) McCoy Inc., a publicly accountable company, has purchased a piece of land with a building to build a new, state-of-the-art widget-manufacturing factory. Construction began in January 2022, and the occupancy permit was received on October 1 2022. McCoy Inc. has a December 31 year end. The expenditures were as follows: Expenditure Purchase of land and building Demolition costs of existing building Property transfer tax Legal fees Direct labour for construction of factory Loan interest to finance expansion Architectural drawings Purchase of company car for the new plant manager Insurance during factory construction Direct material for factory construction Lost sales during construction Expenditure Purchase of land and building Demolition costs of existing building Property transfer tax Legal fees Direct labour for construction of factory Loan interest to finance expansion Instructions A. For each expenditure, complete the following chart to allocate the expenditures to land or factory. For items not capitalized to land or factory, provide a brief explanation. (13 marks) Architectural drawings Purchase of company car for the new plant manager Insurance during factory construction Direct material for factory construction Lost sales during construction Total Amount $512,500 11,800 6,125 Land 1,025 70,652 3,036 15,125 42,000 2,325 81,555 8,800 Factory Other with Explanation Question 1: Property Plant and Equipment (28 marks) McCoy Inc., a publicly accountable company, has purchased a piece of land with a building to build a new, state-of-the-art widget-manufacturing factory. Construction began in January 2022, and the occupancy permit was received on October 1 2022. McCoy Inc. has a December 31 year end. The expenditures were as follows: Expenditure Purchase of land and building Demolition costs of existing building Property transfer tax Legal fees Direct labour for construction of factory Loan interest to finance expansion Architectural drawings Purchase of company car for the new plant manager Insurance during factory construction Direct material for factory construction Lost sales during construction Expenditure Purchase of land and building Demolition costs of existing building Property transfer tax Legal fees Direct labour for construction of factory Loan interest to finance expansion Instructions A. For each expenditure, complete the following chart to allocate the expenditures to land or factory. For items not capitalized to land or factory, provide a brief explanation. (13 marks) Architectural drawings Purchase of company car for the new plant manager Insurance during factory construction Direct material for factory construction Lost sales during construction Total Amount $512,500 11,800 6,125 Land 1,025 70,652 3,036 15,125 42,000 2,325 81,555 8,800 Factory Other with Explanation

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Expenditure Allocation for McCoy Inc Expenditure Land Factory Other with Explanation Purchase of lan... View the full answer