Exercises and Problems Essay

Trudy Company incurred the following costs.1. Sales value on factory machinery purchased $ 5,0002. Painting of and lettering on hand truck today upon purchase 700 3. Installation and testing of factory machinery 2,0004. Real estate brokers commission on land purchased 3,500 5. Insurance premium give for first years insurance on new truck 880 6. Cost of landscaping on property purchased 7,2007. Cost of paving put lot for new building constructed 17,900 8. Cost of clearing, draining, and filling land 13,3009. interior decorators fees on self-constructed building 10,000Items of property, plant and equipment should be initially preserve at cost. Costs include all costs in which ar necessary to assure the assets are in working condition for their think 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 these assets f or restoration of original site. Knowing managements intended use comes in very handy and is extremely important when applying this cost dominion. 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 over a given period of time these items do not get revalued for future financial reporting. Shipping costs roll part of the asset costs, however the cost of accidental insurance or any type of insurance during the later periods are recurring expenses which advantage and is not received for short term, less 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 chronicle(7th ed.). Hoboken, NJ John Wiley & Sons.