Treatment of Various Costs Allegro Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment.Abstract company’s fee for title search $520Architect’s fees 3,170Cash paid for land and dilapidated building thereon 92,000Removal of old building $20,000Less: Salvage 5,500 14,500Interest on short-term loans during construction 7,400Excavation before construction for basement 19,000Machinery purchased (subject to 2% cash discount, which was not taken) 65,000Freight on machinery purchased 1,340Storage charges on machinery, necessitated by non-completion ofbuilding when machinery was delivered 2,180New building constructed (building construction took 6 months fromdate of purchase of land and old building) 485,000Assessment by city for drainage project 1,600Hauling charges for delivery of machinery from storage to new building 620Installation of machinery 2,000Trees, shrubs, and other landscaping after completion of building(Permanent in nature) 5,400Determine the amounts that should be debited to Land, to Buildings, and to Machinery and Equipment. Assume the benefits of capitalizing interest during construction exceed the cost of implementation. Indicate how any costs not debited to these accounts should be recorded.View Solution:
Treatment of Various Costs Allegro Supply Company a newly forme

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