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Chap10Answers_to_Suggested_Problems

Chap10Answers_to_Suggested_Problems - Chapter 10 Property...

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Chapter 10 - Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition Capitalized cost of land : Purchase price $60,000 Demolition of old building $4,000 Less: Sale of materials (2,000 ) 2,000 Legal fees for title investigation 2,000 Total cost of land $64,000 Capitalized cost of building : Construction costs $500,000 Architect's fees 12,000 Interest on construction loan 5,000 Total cost of building $517,000 Note: Property taxes on the land for the period after acquisition are not part of acquisition cost. They are expensed in the period incurred. To record the purchase of a machine. Machine ($45,000 + 2,200 + 700 + 1,000) ....................... 48,900 ........................................................ Accounts payable ......................................................................... 47,200 ............................................................................ Cash ........................................................................... 1,700 To record prepaid insurance for the machine. Prepaid insurance ........................................................ 900 10-1 Chapter 10 Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition EXERCISES Exercise 10-1 Exercise 10-2
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Chapter 10 - Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition ............................................................................ Cash .............................................................................. 900 10-2
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Chapter 10 - Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition Exercise 10-3 Requirement 1 Cost of land and building:
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