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Treatment of Various Costs

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Treatment of Various Costs) Ben Sisko Supply Company, a newly formed corporation;incurred the following expenditures related to Land, to Buildings, and to Machinery;and Equipment.;Abstract company's fee for title search $ 520;Architect's fees 2,800;Cash paid for land and dilapidated building thereon 87,000;Removal of old building $20,000;Less: Salvage 5,500 14,500;Surveying before construction 370;Interest on short-term loans during construction 7,400;Excavation before construction for basement 19,000;Machinery purchased (subject to 2% cash discount, which 55,000;was not taken);Freight on machinery purchased 1,340;Storage charges on machinery, necessitated by 2,180;noncompletion of building when machinery was delivered;New building constructed (building construction took 6 485,000;months from date of purchase of land and old building);Assessment by city for drainage project 1,600;Hauling charges for delivery of machinery from storage to 620;new building;Installation of machinery 2,000;Trees, shrubs, and other landscaping after completion of 5,400;building (permanent in nature);Determine the amounts that should be debited to Land, to Buildings, and to Machinery;and Equipment. Assume the benefits of capitalizing interest during construction exceed;the cost of implementation. Indicate how any costs not debited to these accounts should;be recorded.

 

Paper#26594 | Written in 18-Jul-2015

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