Reference no: EM132555244

True Star Electronics Company had used its own maintenance crew to build an additional wing on its existing factory. The following items were related to the construction project:

a. Architect's fees.

b. The cost of snow removal during construction.

c. Cash discounts earned for prompt payment on materials purchased for construction

d. The cost of building a combined construction office and tool shed that would be tom down once the factory wing had been completed.

e. Cash received from selling the demolished construction office and tool shed rubble as filler for a local road project

f. Interest on money borrowed to finance construction

g. Local real estate taxes during the construction process on the portion of land that was to be Occupied by the new wing

h. The cost of mistakes made during construction.

i. The overhead costs of the maintenance department that included supervision, deprecation in the maintenance department buildings and equipment, heat, light and power related to the maintenance department activities, and the cost allocation to the maintenance department for such items as the cafeteria, medical office, and personnel department

j. The cost of insurance during construction and the cost of any damages or losses arising from injuries or losses not covered by insurance

Question 1: Comment on the capitalization cost associated with the new wing of True Star Electronics Company.