Land
This asset includes the purchase price of land plus costs necessary to prepare it for use.
What is Land?
Machinery, vehicles, computers, furniture, and fixtures are all examples of this type of long-term asset.
What is Equipment?
Patents, trademarks, copyrights, franchises, and goodwill belong to this asset category.
What are Intangible Assets?
The purchase of several assets for one lump-sum price is called this.
What is a basket purchase?
Costs that benefit only the current period are recorded this way.
What is expensed?
Money received from selling salvaged building materials has this effect on the cost of land.
What is it reduces the cost of land?
Sales tax, shipping, and installation are included in equipment cost because they make the asset ready for this.
What is use?
Purchased intangible assets are generally recorded as this
What is an asset (capitalized)?
In a basket purchase, the total cost is allocated using this basis.
What are relative fair values?
Costs that increase future benefits are recorded this way.
What is capitalized?
Real estate commissions, back property taxes, and leveling costs are all included because they help get the land ready for this.
What is its intended use?
Annual insurance and annual property taxes on equipment are recorded this way.
What is expensed as incurred?
Costs of research and development are usually recorded this way.
What is expensed as incurred?
If land has a fair value of $200,000 and total fair value of all assets is $1,000,000, land receives this percentage of the purchase price.
What is 20%?
Routine repairs and maintenance generally receive this accounting treatment.
What is expense?
A company pays $6,000 of the seller's unpaid property taxes from prior years. The company should record this as part of this asset account.
What is Land?
A company pays sales tax, transportation costs, installation costs, and one year of insurance on new equipment. Which cost is NOT capitalized?
What is the annual insurance?
A company develops a patent internally. Which costs can be capitalized?
What are legal fees and filing fees?
Land, building, and equipment are purchased together for $900,000. Their fair values total $1,000,000. The building's fair value is $700,000. What percentage of the purchase price is assigned to the building?
What is 70%?
Replacing a major component of an asset and increasing future benefits is called this type of expenditure.
What is an improvement?
Land costs $500,000. Additional costs include commissions of $30,000, title insurance of $3,000, demolition of an old building for $50,000, leveling costs of $6,000, and salvage proceeds of $5,000. What is the land's capitalized cost?
What is $584,000?
Equipment costs $82,000 plus sales tax of $6,500, transportation of $800, shipping insurance of $200, and installation of $1,500. What amount is capitalized?
What is $91,000?
An internally developed patent costs $200,000 in R&D, plus legal fees of $40,000 and filing fees of $5,000. What amount is recorded as the Patent asset?
What is $45,000?
Land, building, and equipment are purchased together for $900,000. Their fair values total $1,000,000. The building's fair value is $700,000. What dollar amount should be assigned to the Equipment and Land?
Land = $180,000
Equipment = $90,000
A company spends money successfully defending a patent in court. How should those legal costs be recorded?
What is capitalized to the patent account?