Carr Company must determine whether the following items

are included #2493

Carr Company must determine whether the following items are included in property, plant, and
equipment:a. contract priceb. list price c. freight costsd. discounts takene. discounts not takenf.
installation costsg. testing costsh. cost of major overhaul of equipmenti. costs of grading land
prior to constructionj. tax assessment for street improvementsk. delinquent property taxes on
acquired propertyl. cost of tearing down an old building (already owned) in preparation for new
constructionm. cost of insurance during constructionn. avoidable interest costs during
constructiono. landscaping costsp. severance pay for employees dismissed because of the
acquisition of a new machineq. cost of tearing down a building on newly acquired landr.
replacement of an electric motor in a machines. expansion of the heating/cooling system to
accommodate an expansion of a building and certain expected future needst. purchase price of
a service contract for 2 years on the acquired assetu. cost of training new
employeesRequired:1. Indicate which items are included in the cost of property, plant, and
equipment and which items are excluded from the cost of property, plant, and equipment.2.
Next Level What is the general rule that should be followed in determining which costs are
included in property, plant, and equipment?View Solution:
Carr Company must determine whether the following items are included

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