LAND LAND ILLUSTRATION COMPUTATION OF COST OF LAND ILLUSTRATION COMPUTATION OF

Land land illustration computation of cost of land

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LAND LAND
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ILLUSTRATION .. COMPUTATION OF COST OF LAND ILLUSTRATION .. COMPUTATION OF COST OF LAND Sometimes purchased land has a building on it that must be removed to make the site suitable for construction of a new building. In this case, all demolition and removal costs less any proceeds from salvaged materials are chargeable to the Land account. Land Cash price of property 100,000 $ Net removal cost of warehouse 6,000 Legal fee 3,000 Cost of land 109,000 $
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The cost of land improvements includes all expenditures necessary to make the improvements ready for their intended use, such as: 1. parking lots 2. fencing 3. landscaping 4. lighting LAND IMPROVEMENTS LAND IMPROVEMENTS
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The cost of buildings includes all necessary expenditures relating to the purchase or construction of a building. When a building is purchased , such costs include the purchase price, closing costs, and real estate broker s commission. Costs to make the building ready for its intended use consist of expenditures for remodelling and replacing or repairing the roof, floors, wiring, and plumbing. When a new building is constructed , cost consists of the contract price plus payments for architects fees, building permits, interest payments during construction, and excavation costs. BUILDINGS BUILDINGS
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The cost of equipment consists of the cash purchase price, provincial sales taxes, freight charges, and insurance paid by the purchaser during transit. Cost includes all expenditures required in assembling, installing, and testing the unit. Recurring costs such as licenses and annual insurance are expensed as incurred. EQUIPMENT EQUIPMENT
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ILLUSTRATION COMPUTATION OF COST OF DELIVERY TRUCK ILLUSTRATION COMPUTATION OF COST OF DELIVERY TRUCK The cost of equipment consists of the cash purchase price , provincial sales taxes , freight charges , and insurance during transit paid by the purchaser . It also includes expenditures required in assembling , installing , and testing the unit. However, recurring costs such as motor vehicle licenses and accident insurance on company cars and trucks are expensed as incurred. Delivery Truck Cash Price $22,000 Painting and lettering 500 Cost of delivery truck $22,500
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ENTRY TO RECORD PURCHASE OF TRUCK ENTRY TO RECORD PURCHASE OF TRUCK The entry to record the cost of the delivery truck and related expenditures is as follows: Delivery Truck Cash Price $22,000 Painting and lettering 500 Cost of delivery truck $22,500 Account Title and Explanation Debit Credit Delivery Truck 22,500 License Expense 80 Prepaid Insurance 1,600 Cash 24,180 To record puchase of delivery truck.
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ENTRY TO RECORD PURCHASE OF MACHINERY ENTRY TO RECORD PURCHASE OF MACHINERY The summary entry to record the cost of the factory machinery and related expenditures is as follows: Factory Machinery Cash price $50,000 Insurance during shipping 500 Installation and testing 1,000 Cost of factory machinery $51,500 Account Title and Explanation Debit Credit Factory Machinery 51,500 Cash 51,500 To record puchase of factory machinery.
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Amortization is the process of allocating to expense the cost of a capital asset over its useful (service) life in a rational and systematic manner.
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