Chapter 6 Exercises.docx - Maria Garnica Bridgette Mahan FA 223 Chapter 6 Exercises Exercise 6.10 For each of the following expenditures indicate the

Chapter 6 Exercises.docx - Maria Garnica Bridgette Mahan FA...

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Maria Garnica Bridgette Mahan FA 223 05/11/2019 Chapter 6 Exercises: Exercise 6.10: For each of the following expenditures, indicate the type of account (asset or expense) in which the expenditure should be recorded. Explain your answers. a. $2,400 for repairing damage that resulted from the careless unloading of a new machine - Expense: The repairing damage that resulted from the careless unloading of a new machine should be expensed because this cost doesn’t extend the useful life of the asset. b. $21,600 cost of designing and registering a trademark - Asset: The cost of designing and registering a trademark should be capitalized and amortized over it’s useful life or legal life (whichever one is shorter) c. $11,100 in legal fees incurred to perform a title search for the acquisition of land - Asset: Legal fees incurred to perform a title search for the acquisition of land are included in the costs incurred to get the land ready for use and therefore should be capitalized.
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  • Fall '19
  • Depreciation, Generally Accepted Accounting Principles, Target Co., Takeover Co.

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