Reference no: EM132834325
The following expenditures relating to property, plant, and equipment were made by Bachinski Ltd.:
1. Paid $1.2 million for a plant site.
2. Paid $8,000 of legal fees on the purchase of the plant site.
3. Paid $39,000 to demolish an old building on the plant site; residual materials were sold for $7,000.
4. Paid $55,000 for paving the parking lot on the plant site.
5. Paid $57,600 in architect fees for the design of the new plant.
6. Promised to pay $150,000 in restoration costs for the land when the company is finished using the plant site.
7. Paid $80,000 for a new delivery truck.
8. Paid $3,000 to have the company name and advertising slogan painted on the new truck.
9. Paid a $400 motor vehicle licence fee on the new truck.
10. Paid $2,800 for a one-year insurance policy on the new truck.
Problem 1: Explain what types of expenditures should be included in determining the cost of property, plant, and equipment.
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