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To what extent do you consider the following items to be proper costs of the fixed asset? Give reasons for your opinions. (a) Overhead of a business that builds its own equipment. (b) Cash discounts on purchases of equipment. (c)

To what extent do you consider the following items to be proper costs of the fixed asset? Give reasons for your opinions.

(a) Overhead of a business that builds its own equipment.

(b) Cash discounts on purchases of equipment.

(c) Interest paid during construction of a building.

(d) Cost of a safety device installed on a machine.

(e) Freight on equipment returned before installation, for replacement by other equipment of greater capacity.

(f) Cost of moving machinery to a new location.

(g) Cost of plywood partitions erected as part of the remodeling of the office.

(h) Replastering of a section of the building.

(i) Cost of a new motor for one of the trucks.

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a Overhead of a business that builds its own equipment Some accountants have maintained that the equipment account should be charged only with the additional overhead caused by such construction Howev…View the full answer


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Intermediate Accounting

Intermediate Accounting

ISBN: 978-0470423684

13th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield

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Posted Date: February 19, 2011 02:29:08
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