Chapter 9 WS_Answers-1

Chapter 9 WS_Answers-1 - Chapter 9 Worksheet Section 6 Name...

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Chapter 9 Worksheet Section 6 Name . 1. The following expenditures relating to plant assets were made by JW Company during the first 2 months of 2010. 1. Paid $10,000 of accrued taxes at the time the plant site was acquired. 2. Paid $500 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit. 3. Paid $650 sales taxes on a new delivery truck. 4. Paid $21,000 for parking lots on the new plant site. 5. Paid $250 to have the company name and slogan on the new delivery truck. 6. Paid $12,000 for installation of new factory machinery. 7. Paid $1000 for a 1-year accident insurance policy on the new delivery truck. 8. Paid $95 motor vehicle license fee on the new truck. Instructions 1. Explain the application of the cost principle in determining the acquisition cost of plant assets. a. Under the cost principle, the acquisition cost for a plant asset includes all expenditures necessary to acquire the asset and make it ready for its intended use. b. Cost is measured by the cash paid in a cash transaction, or by the cash equivalent price paid when noncash assets are used in payment. c.
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Chapter 9 WS_Answers-1 - Chapter 9 Worksheet Section 6 Name...

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