Answer: Please refer to Explanation
Explanation:
1.Paid $5,000 of accrued taxes at time plant site was acquired.
LAND ACCOUNT because it is to be capitalized as it was part of the Acquisition Cost.
2.Paid $200 insurance to cover possible accident loss on new factory machinery while the machinery was in transit.
EQUIPMENT ACCOUNT as it is part of Acquisition Cost.
3.Paid $850 sales taxes on new delivery truck.
EQUIPMENT ACCOUNT as it is again part of Acquisition Cost.
4.Paid $17,500 for parking lots and driveways on new plant site.
LAND IMPROVEMENT ACCOUNT
5.Paid $250 to have company name and advertising slogan painted on new delivery truck.
EQUIPMENT ACCOUNT as it is a cost of setting the PPE up.
6.Paid $8,000 for installation of new factory machinery.
EQUIPMENT ACCOUNT as this expense is again part of setting the equipment up.
7.Paid $900 for one-year accident insurance policy on new delivery truck.
PREPAID INSURANCE because this is a periodic cost and those are not capitalized as they provide only a short term benefit.
8.Paid $75 motor vehicle license fee on the new truck.
LICENSE EXPENSE because it is also a period cost.
