Classify each of the following costs associated with long-lived assets as one of the following: Fees paid to architect todesign new office buildingCost of insurance during theconstruction of new officebuildingInterest on money borrowedto finance construction ofnew office buildingSales taxes paid on newBuildingsfactory equipmentFreight costs paid onpurchase of new equipmentMachinery and equipmentRepairs made to used officeLandequipmentCosts to survey a new pieceLand improvementsof land for a new businesslocationCosts of governmentpermits required to developland for a new businesslocationPurchase price of landpurchased for new businesssiteLandscaping at newbusiness location Classify each of the following costs associated with long-lived assets as one of the following:Clear AllFences around land at newbusiness locationPaved parking areas at newbusiness locationOutdoor lighting at newbusiness locationWalkways to surround newLand improvementsbusiness locationMadifying a buildingpurchased for new businessBuildingslocationSupplies (materials) used totest new equipmentLandCost of installing newequipmentMachinery and equipmentCost of grading and levelingland to be used for a newbusiness siteCost of removing an existingbuilding to ready land foruse as a new business siteCost assessed by city forpaving a public street thatborders land on which a newbusiness location will beconstructed

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Classify each of the following costs associated with long-lived assets as one of the following

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 19E

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Some of the following items should be treated as capital and some as revenue. Carriage paid to bring the purchased machinery to the works. Complete redecoration of the premises at a cost of Kshs.150,000. A quarterly account for heating. The purchase of a soft drinks vending machine for the canteen with a stock of soft drinks. Wages paid by a building contractor to his own workmen for the erection of an office in the builder's stockyard. Required: For each item, give an appropriate classification. Give justification for each classification.