ACS Company Made the Following Expenditures in Connection with the Construction

question 121

Essay

ACS Company made the following expenditures in connection with the construction of its new cross fit facility:
$$\begin{array} { | l | r | } \hline \text { Architect's fees } & 9,000 \\\hline \text { Cash paid for land and old building } & 140,000 \\\hline \text { Removal of old building } & 20,000 \\\hline \text { Survey to site the new building } & ( 8,000 )\\\hline \text { Legal fees for title search } & 1,000 \\\hline \text { Excavation for construction of basement } & 2,500 \\\hline \text { Machinery purchased } & 72,000 \\\hline \begin{array} { l } \text { Storage charges on machirery because building was not ready } \\\text { when machirery was delivered }\end{array} & 600 \\\hline \text { Freight on machinery purchased } & 2,000 \\\hline \text { Hauling charges to deliver machinery from storage to new } \\\text { building } & 800 \\\hline \text { Construction costs of new building } & 615,000 \\\hline \text { Landscaping } & 7,050 \\\hline \text { Installation of machinery } & 9,000 \\\hline\end{array}$$ Prepare a schedule showing the amounts to be recorded as Land, Building, and Machinery and Equipment and Expenses.

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Definitions:

Fiduciary Duty

An obligation to act in the best interest of another party, for example, a company's management acting in the best interests of its shareholders.

Management

The process of dealing with or controlling things or people, often within an organization or a project, including planning, organizing, leading, and controlling resources.

Subsidiary

A company that is controlled by another company, known as the parent company, through ownership of a majority of its voting stock.

Consolidation Purposes

The process of combining and presenting the financial statements of a parent company and its subsidiaries as one single entity's financial statements.