Costs Included in Assets
Below Is a List of Various

question 25

Essay

Costs included in assets
Below is a list of various expenditures that an organization could make. In the columns marked Land, Building, Equipment, and Expensed, indicate by a “+” or “–“ which columns the expenditure would be added to or subtracted from. The first has been done for you as an example.

$$\begin{array} { | l | l | l | l | l | } \hline \text { Item } & \text { Land } & \text { Building } & \text { Equipment } & \text { Expensed } \\\hline \text { 0. Construction costs } & & + & & \\\hline \text { 1. Title search } & & & & \\\hline \text { 2. Property transfer tax } & & & & \\\hline \text { 3. Installation of equipment } & & & & \\\hline \text { 4. Soil decontamination costs } & & & & \\\hline \text { 5. Transportation costs of equipment } & & & & \\\hline \text { 6. Labour to construct building } & & & & \\\hline \text { 7. Special foundation for machinery } & & & & \\\hline \text { 8. Damage to machinery while uncrating } & & & & \\\hline \begin{array} { l } \text { 9. Proceeds from salvage of old building on } \\\text { land purchased for factory site }\end{array} & & & & \\\hline \begin{array} { l } \text { 10. Property taxes in arrears paid on } \\\text { purchase }\end{array} & & & & \\\hline \text { 11. Insurance on building after occupancy } & & & & \\\hline \text { 12. Clearing land for factory site } & & & & \\\hline\end{array}$$

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Definitions:

Tax Standpoint

A perspective or consideration related to tax implications, obligations, or benefits in financial planning and decision making.

Net Assets

The difference between total assets and total liabilities, representing the owner's or shareholders' equity in a company.

Ownership

The legal right of possessing, using, and disposing of something, especially property or goods.

Voting Shares

Shares that give the shareholder the right to vote on company matters, such as electing directors and approving major company decisions.