A company is constructing a new production facility. The following costs have been incurred: Site preparation costs$50,000Architects’ fees$26,000Legal fees$10,000Purchase of site$200,000Costs incurred to relocate employees to the new facility$30,000Administration costs$50,000Total costs$366,000The architects’ fees relate to the design of the new facility and the legal fees relate to legal advice received on the contract to purchase the site.The total value that should be recognized as Property, Plant and Equipment for the new facility should be Question 10Answera.$ 314,000b.$ 324,000c.$ 344,000d.$ 286,000

The overall cost of all resources that a company uses to buy, build, or produce an asset is called…

Answered: A company is constructing a new…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 46P

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A company is constructing a new production facility. The following costs have been incurred:

Site preparation costs	$50,000
Architects’ fees	$26,000
Legal fees	$10,000
Purchase of site	$200,000
Costs incurred to relocate employees to the new facility	$30,000
Administration costs	$50,000
Total costs	$366,000

The architects’ fees relate to the design of the new facility and the legal fees relate to legal advice received on the contract to purchase the site.

The total value that should be recognized as Property, Plant and Equipment for the new facility should be

Question 10Answer

$ 314,000

$ 324,000

$ 344,000

$ 286,000

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