C & M Securities made several expenditures during the current fiscal year, including the following: (a) For each of the items listed below, indicate whether the cost should be debited to land, buildings, equipment, land improvements, or an expense account. Amount Description of Expenditure 1. $150,000 Acquisition of a piece of land to be used as a building site No effectEquipmentBuildingExpense or Land improvementsLandExpenseExpense or BuildingsLand improvements 2. 3,000 Demolition of a small building on the land, to make way for the new building Expense or BuildingsNo effectLand improvementsBuildingExpenseEquipmentLandExpense or Land improvements 3. 7,500 Levelling of the land to prepare it for construction of the new building No effectLand improvementsExpense or Land improvementsBuildingLandExpenseExpense or BuildingsEquipment 4. 290,000 Construction of the new building Expense or BuildingsExpense or Land improvementsNo effectExpenseLandLand improvementsEquipmentBuilding 5. 12,000 Paving of a parking lot beside the building Expense or Land improvementsLandEquipmentExpense or BuildingsNo effectLand improvementsExpenseBuilding 6. 6,000 Addition of decorative landscaping around the building (such as planting flowers and ornamental shrubs) LandExpense or Land improvementsNo effectExpense or BuildingsBuildingEquipment 7. 80,000 Purchase of a new piece of equipment Expense or BuildingsEquipmentExpense or Land improvementsLandExpenseNo effectBuildingLand improvements 8. 6,000 Sales taxes on the new equipment If non-recoverable LandBuildingExpense or Land improvementsEquipmentExpenseNo effectExpense or BuildingsLand improvements If GST or HST No effectLand improvementsLandBuildingEquipmentExpenseExpense or BuildingsExpense or Land improvements 9. 3,000 Installation of the new equipment No effectLand improvementsExpenseLandExpense or BuildingsExpense or Land improvementsEquipmentBuilding 10. 1,500 Testing and adjustment of the new equipment prior to its use No effectLandEquipmentExpenseExpense or Land improvementsBuildingLand improvementsExpense or Buildings 11. 1,000 Minor repairs to some old equipment No effectEquipmentExpense or Land improvementsExpenseLand improvementsBuildingLandExpense or Buildings 12. 7,000 Major overhaul of an old piece of equipment, extending its useful life by three years No effectLand improvementsBuildingExpense or Land improvementsExpense or BuildingsEquipmentLandExpense 13. 1,200 Routine maintenance of equipment Expense or Land improvementsNo effectEquipmentExpenseLandExpense or BuildingsLand improvementsBuilding 14. 2,000 Replacement of windows broken by disgruntled employees during a labour dispute Expense or BuildingsLandExpense or Land improvementsExpenseNo effectBuildingLand improvementsEquipment

C & M Securities made several expenditures during the current fiscal year, including the following: (a) For each of the items listed below, indicate whether the cost should be debited to land, buildings, equipment, land improvements, or an expense account. Amount Description of Expenditure 1. $150,000 Acquisition of a piece of land to be used as a building site No effectEquipmentBuildingExpense or Land improvementsLandExpenseExpense or BuildingsLand improvements 2. 3,000 Demolition of a small building on the land, to make way for the new building Expense or BuildingsNo effectLand improvementsBuildingExpenseEquipmentLandExpense or Land improvements 3. 7,500 Levelling of the land to prepare it for construction of the new building No effectLand improvementsExpense or Land improvementsBuildingLandExpenseExpense or BuildingsEquipment 4. 290,000 Construction of the new building Expense or BuildingsExpense or Land improvementsNo effectExpenseLandLand improvementsEquipmentBuilding 5. 12,000 Paving of a parking lot beside the building Expense or Land improvementsLandEquipmentExpense or BuildingsNo effectLand improvementsExpenseBuilding 6. 6,000 Addition of decorative landscaping around the building (such as planting flowers and ornamental shrubs) LandExpense or Land improvementsNo effectExpense or BuildingsBuildingEquipment 7. 80,000 Purchase of a new piece of equipment Expense or BuildingsEquipmentExpense or Land improvementsLandExpenseNo effectBuildingLand improvements 8. 6,000 Sales taxes on the new equipment If non-recoverable LandBuildingExpense or Land improvementsEquipmentExpenseNo effectExpense or BuildingsLand improvements If GST or HST No effectLand improvementsLandBuildingEquipmentExpenseExpense or BuildingsExpense or Land improvements 9. 3,000 Installation of the new equipment No effectLand improvementsExpenseLandExpense or BuildingsExpense or Land improvementsEquipmentBuilding 10. 1,500 Testing and adjustment of the new equipment prior to its use No effectLandEquipmentExpenseExpense or Land improvementsBuildingLand improvementsExpense or Buildings 11. 1,000 Minor repairs to some old equipment No effectEquipmentExpense or Land improvementsExpenseLand improvementsBuildingLandExpense or Buildings 12. 7,000 Major overhaul of an old piece of equipment, extending its useful life by three years No effectLand improvementsBuildingExpense or Land improvementsExpense or BuildingsEquipmentLandExpense 13. 1,200 Routine maintenance of equipment Expense or Land improvementsNo effectEquipmentExpenseLandExpense or BuildingsLand improvementsBuilding 14. 2,000 Replacement of windows broken by disgruntled employees during a labour dispute Expense or BuildingsLandExpense or Land improvementsExpenseNo effectBuildingLand improvementsEquipment

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

100%

C & M Securities made several expenditures during the current fiscal year, including the following:

(a)

For each of the items listed below, indicate whether the cost should be debited to land, buildings, equipment, land improvements, or an expense account.

	Amount	Description of Expenditure
1.	$150,000	Acquisition of a piece of land to be used as a building site	No effectEquipmentBuildingExpense or Land improvementsLandExpenseExpense or BuildingsLand improvements
2.	3,000	Demolition of a small building on the land, to make way for the new building	Expense or BuildingsNo effectLand improvementsBuildingExpenseEquipmentLandExpense or Land improvements
3.	7,500	Levelling of the land to prepare it for construction of the new building	No effectLand improvementsExpense or Land improvementsBuildingLandExpenseExpense or BuildingsEquipment
4.	290,000	Construction of the new building	Expense or BuildingsExpense or Land improvementsNo effectExpenseLandLand improvementsEquipmentBuilding
5.	12,000	Paving of a parking lot beside the building	Expense or Land improvementsLandEquipmentExpense or BuildingsNo effectLand improvementsExpenseBuilding
6.	6,000	Addition of decorative landscaping around the building (such as planting flowers and ornamental shrubs)	LandExpense or Land improvementsNo effectExpense or BuildingsBuildingEquipment
7.	80,000	Purchase of a new piece of equipment	Expense or BuildingsEquipmentExpense or Land improvementsLandExpenseNo effectBuildingLand improvements
8.	6,000	Sales taxes on the new equipment
		If non-recoverable	LandBuildingExpense or Land improvementsEquipmentExpenseNo effectExpense or BuildingsLand improvements
		If GST or HST	No effectLand improvementsLandBuildingEquipmentExpenseExpense or BuildingsExpense or Land improvements
9.	3,000	Installation of the new equipment	No effectLand improvementsExpenseLandExpense or BuildingsExpense or Land improvementsEquipmentBuilding
10.	1,500	Testing and adjustment of the new equipment prior to its use	No effectLandEquipmentExpenseExpense or Land improvementsBuildingLand improvementsExpense or Buildings
11.	1,000	Minor repairs to some old equipment	No effectEquipmentExpense or Land improvementsExpenseLand improvementsBuildingLandExpense or Buildings
12.	7,000	Major overhaul of an old piece of equipment, extending its useful life by three years	No effectLand improvementsBuildingExpense or Land improvementsExpense or BuildingsEquipmentLandExpense
13.	1,200	Routine maintenance of equipment	Expense or Land improvementsNo effectEquipmentExpenseLandExpense or BuildingsLand improvementsBuilding
14.	2,000	Replacement of windows broken by disgruntled employees during a labour dispute	Expense or BuildingsLandExpense or Land improvementsExpenseNo effectBuildingLand improvementsEquipment

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