Exercises and Problems Essay

Trudy Comp any incurred the following costs.1. Sales take account on factory machinery purchased $ 5,0002. Painting of and lettering on truck immediately upon purchase 700 3. Installation and examen of factory machinery 2,0004. Real estate brokers commission on land purchased 3,500 5. Insurance insurance premium paid for first years insurance on new truck 880 6. Cost of embellish on property purchased 7,2007. Cost of paving parking lot for new building constructed 17,900 8. Cost of clearing, draining, and choice land 13,3009. Architects fees on self-constructed building 10,000Items of property, plant and equipment should be initially recorded at cost. Costs include all costs in which are necessary to assure the assets are in working condition for their intended use. This includes original purchase prices along with costs of site preparations, delivery, handling, installation, professional fees include for architects and engineers with estimations for dismantling and removing th ese assets for restoration of original site. Knowing managements intended use comes in very handy and is exceedingly important when applying this cost principle. Cost principle assets are to be recorded at cost this equals the value which was reciprocated at the time of the attainment. Assets in the United States like land and buildings appreciate in value all over a given period of time these items do not get revalued for future financial reporting. merchant marine costs form part of the asset costs, however the cost of accidental insurance or any type of insurance during the later periods are recurring expenses which benefit and is not received for short term, less(prenominal) than a year therefore it does not get included within the costs of assets.ReferencesWeygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2010). Financial accounting(7th ed.). Hoboken, NJ John Wiley & Sons.