Costs Incurred by Mills Company That Relate to Its Property

question 16

Essay

Costs incurred by Mills Company that relate to its property, plant, and equipment assets might be recorded in one of the five following accounts:
a. an expense account
b. Accumulated Depreciation
c. Land
d. Building
e. Equipment
Required:
For each of the costs identified below, indicate the type of account in which the cost should be recorded by placing the appropriate letter in the space provided.
____ 1. The legal fees associated with the acquisition of land.
____ 2. The cost of replacing the engine in a truck when the cost of the old engine is not known.
____ 3. The cost of replacing an oil furnace with an electric furnace book value of the oil furnace is known).
____ 4. The cost of a new addition to a warehouse that will be used to store inventory.
____ 5. The cost of renovating a recently purchased ten-year-old office building.
____ 6. The materials and labor costs incurred in installing a new piece of equipment.
____ 7. The costs of tuning, lubricating, and tire rotation on a fleet of delivery trucks.
____ 8. The additional costs in the construction of a building due to a small fire that occurred during the construction period.

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Definitions:

Feedback

Information provided regarding aspects of one's performance or behavior, intended to reinforce positives or identify areas for improvement.

Performance Goals

Specific, measurable objectives set for employees or teams to achieve within a timeframe as part of the performance management process.

Employee Relations

The management of the relationship between employers and employees, focusing on maintaining good working conditions, communication, and resolving conflicts.

Human Resource Management

The strategic approach to the effective management of people in a company or organization so that they help the business gain a competitive advantage.