All that cost that has been incurred to acquire the asset would be capitalized and will be included in the cost of the asset that has been purchased.
The main question that arises here is that till what point the cost would need to be included.
This means that if we are buying a machine that has to be installed in our factory than what will that point of time till when we will take the cost that has been incurred to buy that machine.
As per the general rule book all that cost that has been incurred and is concerned with buying an asset or transfer of title will be included in the cost of the asset.
So any cost that has been spent to buy an asset will be included in the cost of asset. This means that any cost that has been incurred after the asset has been purchased or been installed in our site will not to be included in the cost of that particular asset.
Purchase price of land 320000
Legal fees 4100
Delinquent property taxes 6500
Total cost of land 330600
In calculating the total cost for stores, only that cost has been included that has been deemed to be the most necessary one and without such cost the making of store is not possible.
Total cost for stores
Architect fees 30700
Construction cost 850000
Capitalized interest during construction 16000
Landfill 13900
Clearing of Trees' 9600
Land survey fees 4000
Foundation cost 15000
Insurance cost for construction 2200
Sale of timber -3000
Total 938400
On January 1, 2018, Carriage Corporation purchased a parcel of land to be used as a...
Exercise 10-1 Acquisition costs; land and building [LO10-1] On March 1, 2018, Beldon Corporation purchased land as a factory site for $73,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2018. Costs incurred during this period are listed below: Demolition of old building $ 5,500 Architect’s fees (for new building) 12,000 Legal fees for title investigation of land 2,000 Property taxes on land (for period beginning March...
On February 1, 2013, Edwards Corporation purchased a parcel of land as a factory site for $250,000. It demolished an old building on the property and began construction on a new building that was completed on October 2, 2013. Edwards has no debt. Costs incurred during this period were: Demolition of old building $6,000 Sale of salvaged materials from the demolition 1,000 Architects’ fees 12,000 Legal fees for land purchase 2,000 Construction costs 600,000 Required: At what amount should Edwards...
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Acquisition of Land and Building On February 1, 2019, Edwards Corporation purchased a parcel of land as a factory site for $120,000. It demolished an old building on the property and began construction on a new building that was completed on October 2, 2019. Costs incurred during this period are: Demolition of old building $ 10,000 Architect's fees 20,000 Legal fees for title investigation and purchase contract 5,000 Construction costs 625,000 Edwards sold salvaged materials resulting from the demolition for...
On March 1, 2021, Beldon Corporation purchased land as a factory site for $71,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2021. Costs incurred during this period are listed below: Demolition of old building $ 9,500 Architect’s fees (for new building) 10,000 Legal fees for title investigation of land 7,500 Property taxes on land (for period beginning March 1, 2021) 4,100 Construction costs 610,000 Interest on...
On March 1, 2021, Beldon Corporation purchased land as a factory site for $76,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2021. Costs incurred during this period are listed below: Demolition of old building $ 7,000 Architect’s fees (for new building) 15,000 Legal fees for title investigation of land 3,500 Property taxes on land (for period beginning March 1, 2021) 4,600 Construction costs 660,000 Interest on...
On March 1, 2021, Beldon Corporation purchased land as a factory site for $63,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2021. Costs incurred during this period are listed below: Demolition of old building Architect's fees (for new building) Legal fees for title investigation of land Property taxes on land (for period beginning March 1, 2021) Construction costs Interest on construction loan $ 5,500 15,000 3,500...
On March 1, 2021, Beldon Corporation purchased land as a factory site for $74,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2021. Costs incurred during this period are listed below: Demolition of old building Architect's fees (for new building) Legal fees for title investigation of land Property taxes on land (for period beginning March 1, 2021) Construction costs Interest on construction loan $ 6,000 13,000 2,500...
On March 1, 2021, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2021. Costs incurred during this period are listed below: Demolition of old building Architect's fees (for new building) Legal fees for title investigation of land Property taxes on land (for period beginning March 1, 2021) Construction costs Interest on construction loan $ 4,000 12,000 2,000...
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