The following expenditures relating to plant assets were made by Devereaux Company during the first 2 months of 2014.
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1.
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Paid $5,000 of accrued taxes at time plant site was acquired. |
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2.
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Paid $400 insurance to cover possible accident loss on new factory machinery while the machinery was in transit. |
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3.
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Paid $850 sales taxes on new delivery truck. |
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4.
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Paid $17,500 for parking lots and driveways on new plant site. |
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5.
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Paid $310 to have company name and advertising slogan painted on new delivery truck. |
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6.
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Paid $8,000 for installation of new factory machinery. |
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7.
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Paid $900 for one-year accident insurance policy on new delivery truck. |
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8.
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Paid $90 motor vehicle license fee on the new truck. |
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Instructions
| (a) |
Explain the application of the cost principle in determining the acquisition cost of plant assets.
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| (b) |
List the numbers of the foregoing transactions, and opposite each indicate the account title to which each expenditure should be debited
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