Question

Determine property, plant, and equipment costs. (LO 1) E10-2 Benedict Company incurred the following costs. 1. Sales tax on factory machinery purchased 2. Painting of and lettering on truck immediately upon purchase 3. Installation and testing of factory machinery 4. Real estate broker's commission on land purchased Insurance premium paid for first year's insurance on new truck 6. Cost of landscaping on property purchased 7. Cost of paving parking lot for new building constructed 8. Cost of clearing, draining, and filling land 9. Architect's fees on self-constructed building $ 5,000 700 2,000 3,500 880 7,200 17,900 13,300 10,000 Exercises Instructions Indicate to which account Benedict would debit each of the costs.

Answer 1

	Debit to	Amount ($)
1.	Factory Machinery (or Equipment a/c )	5,000
2.	Truck (or Equipment a/c)	700
3.	Factory Machinery (or Equipment)	2,000
4.	Land	3,500
5.	Prepaid Insurance (or Insurance Expenses)	880
6.	Land Improvement	7,200
7.	Land Improvement	17,900
8.	Land	13,300
9.	Building	10,000

There is possibility some options may be different from those available. Hence provided in brackets.

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