Reference no: EM133016273

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.

Required - Explain the application of the historical cost principle in determining the acquisition cost of plant assets.