Explain the application of the historical cost principle

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Reference no: EM132951429

Question: The following expenditures relating to plant assets were made by Glenn Company during the first 2 months of 2022.

1.Paid $7,000 of accrued taxes at the time the plant site was acquired.2.Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit.3.Paid $850 sales taxes on a new delivery truck.4.Paid $21,000 for parking lots and driveways on the new plant site.5.Paid $250 to have the company name and slogan painted on the new delivery truck.6.Paid $8,000 for installation of new factory machinery.7.Paid $900 for a 2-year accident insurance policy on the new delivery truck.8.Paid $75 motor vehicle license fee on the new truck.

(a) Explain the application of the historical cost principle in determining the acquisition cost of plant assets.

Reference no: EM132951429

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