Question

Indicate whether each of the following expenditures should be classified as land, land improvements, buildings, equipment, or none of these. 1. Parking lots 2. Electricity used by a machine 3. Excavation costs 4. Interest on building construction loan 5. Cost of trial runs for machinery 6. Drainage costs 7. Cost to install a machine 8. Fences 9. Unpaid (past) property taxes assumed 10. Cost of tearing down a building when land and a building on it are purchased

Answer 1

Answer:

Explanation:

The costs which are related to the land, land improvements, buildings, equipment are classified and if none of the cost is not related than it would be consider as none of these. The classification is shown below:

1. Parking lots - Land improvements

2. Electricity used by a machine - None of these

3. Excavation costs - Building

4. Interest on building construction loan - Building

5. Cost of trial runs for machinery - equipment

6. Drainage costs - land

7. Cost to install a machine - equipment

8. Fences - Land improvement

9. Unpaid (past) property taxes assumed - land

10. Cost of tearing down a building when land and a building on it are purchased - land