Ask Question
30 August, 15:14

Cala Manufacturing purchases land for $477,000 as part of its plans to build a new plant. The company pays $40,700 to tear down an old building on the lot and $60,165 to fill and level the lot. It also pays construction costs $1,535,600 for the new building and $96,932 for lighting and paving a parking area. Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash.

+2
Answers (1)
  1. 30 August, 16:22
    0
    (A) Record the Total Costs of the plant assets.

    Transaction General Journal Debit Credit

    1 Land 477000

    Dismantling cost 40700

    Leveling cost 60165

    Construction cost 1535600

    Lighting & Paving Area 96932

    Cash 2210397

    Note:

    1. According to IAS 16 Cost of asset consists of expense which has endurs future economic benefit.

    2. Cost of Asset includes construction cost, development cost, Dismantling cost and lighting & paving area etc.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Cala Manufacturing purchases land for $477,000 as part of its plans to build a new plant. The company pays $40,700 to tear down an old ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers