Required: For each transaction below, indicate the account to be adjusted. Explain your answers and state any assumptions you make. Example:
CP 8‐1
Accountants distinguish between capital and revenue expenditures for some types of transactions. The entries for such transactions can be made to any one of the following accounts:
Balance sheet accounts
- Land
- Buildings
- Land improvements
- Equipment
- Trucks
- Automobiles
- Accumulated
depreciation
Income statement accounts
- A revenue account
- An expense account.
Required: For each transaction below, indicate the account to be adjusted. Explain your answers and state any assumptions you make.
Example:
- Buildings - Architect fees to design building
Battery purchased for truck
Cash discount received on payment for equipment
Commission paid to real estate agent to purchase land
Cost of equipment test runs
Cost to remodel building
Cost to replace manual elevator with automatic elevator
Cost of sewage system
Equipment assembly expenditure
Expenditures for debugging equipment
Installation of air‐conditioner in automobile
Insurance paid during construction of building
Legal fees associated with court case to defend title to land purchased
Oil change for truck
Proceeds received on demolition of derelict building on land purchased
Expenditures for removal of derelict structures
Repair made to building after moving in
Repair of collision damage to truck
Repair of torn seats in automobile
Replacement of rusted fender on automobile
Replacement of transmission in automobile
Special floor foundations for installation of equipment
Tires purchased for truck
Transportation expenditures to bring equipment to plan
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
