Buildings permits Contractor charges Payments for materials labor and

Buildings permits contractor charges payments for

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Buildings permits Contractor charges Payments for materials, labor, and miscellaneous costs Purchase price Costs to renovate the building to ready the building for use, which may include any of the charges listed under the “Constructing a Building” column Machinery and Equipment The cost of machinery and equipment includes the following: Purchase price (less any discounts) Transportation charges Insurance while in transit Sales tax and other taxes Purchase commission Installation costs Testing costs (prior to use of the asset) After the asset is up and running, the company no longer capitalizes the cost of insurance, taxes, ordinary repairs, and maintenance to the Equipment account
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From that point on, insurance, taxes, repairs, and maintenance costs are recorded as expenses Furniture and Fixtures examples: desks, chairs, file cabinets, display racks, shelving, and so forth the cost of furniture and fixtures includes the basic cost of each asset (less any discounts), plus all other costs to ready the asset for its intended use. Lump-Sum Purchase 6. Relative-Market-Value Method: a method of allocating the total cost (100%) of multiple assets purchased at one time. Total cost is divided among the assets according to their relative market value Total Market Value = Land Market Value + Building Market Value Percentage of Total Value = Land Market Value / Total Market Value
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  • Fall '14
  • CarolRowey
  • Depreciation, tangible assets, cost of the asset

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