This exercise will give you practice in identifying capital expenditures and revenue expenditures . Sellen Supply Company, a newly formed corporation, incurred the following expenditures related to Land, Buildings, and Equipment.
|
Abstract company”s fee for title search |
$520 |
|
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Architect”s fees |
“I 0,200 |
|
|
Cash paid for land and dilapidated building thereon |
100.000 |
|
|
Removal of old building |
$20,000 |
|
|
Less salvage |
5.500 |
14,500 |
|
Surveying before construction |
370 |
|
|
Excavation before construction for basement |
19,000 |
|
|
Machinery purchased |
55,000 |
|
|
Freight on machinery purchased |
1,340 |
|
|
Jew building constructed |
500,000 |
|
|
Assessment by city for drainage project |
1,600 |
|
|
Installation of machinery |
2.000 |
|
|
Trees, shrubs, and other landscaping after completion of building (permanent in nature) |
5.400 |
Instructions
(a) Identify the amounts that should be debited to Land.
(b) Identify the amounts that should be debited to Buildings.
(c) Identify the amounts that should be debited to Equipment.