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Inclusion in Property, Plant, and Equipment Guthrie Inc. must determine whether the following items are included in property, plant, and equipment: a. idle equipment awaiting sale b. machinery kept on hand and used only when other machinery breaks c. land held for investment d. the right to publish a literary work e. progress payments on a building being constructed by a contractor f. fully depredated assets still being used g. expenditures to improve leased property h. equipment leased to others i. purchase of an asset with an expected life of 9 months j. obligation to remove leasehold improvement at the termination of a lease Required: 1. Indicate which items are included in the cost of property, plant, and equipment and which items are excluded from the cost of property, plant, and equipment. 2. Next Level For each item excluded from property, plant, and equipment, explain why it was excluded.

BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

Solutions

Chapter
Section
Chapter 10, Problem 1E
Textbook Problem

Inclusion in Property, Plant, and Equipment Guthrie Inc. must determine whether the following items are included in property, plant, and equipment:

  1. a. idle equipment awaiting sale
  2. b. machinery kept on hand and used only when other machinery breaks
  3. c. land held for investment
  4. d. the right to publish a literary work
  5. e. progress payments on a building being constructed by a contractor
  6. f. fully depredated assets still being used
  7. g. expenditures to improve leased property
  8. h. equipment leased to others
  9. i. purchase of an asset with an expected life of 9 months
  10. j. obligation to remove leasehold improvement at the termination of a lease

Required:

  1. 1. Indicate which items are included in the cost of property, plant, and equipment and which items are excluded from the cost of property, plant, and equipment.
  2. 2. Next Level For each item excluded from property, plant, and equipment, explain why it was excluded.

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Chapter 10 Solutions

Intermediate Accounting: Reporting And Analysis
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