Accounting 2 Problem

E10-5 (Treatment of Various Cost) Ben Sisko Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment.Abstract company’s fee for title search                                                                             520Architect’s fees                                                                                                              3,170Cash paid for land and dilipidated building thereon                                                     87,000                                                                               Removal of old building                                                                      20,000    Less:Salvage                                                                                   5,500               14,500Interest on short-term loans during construction                                                           7,400Excavation before construction for basement                                                              19,000Machinery purchased (subject to 2% cash discount,                                                   55,000which was not taken)Freight on machinery purchased                                                                                   1,340Storage charges on machinery, necessitated by                                                           2,180noncompletion of building when machinery was deliveredNew building constructed (building construction took 6 months                                 485,000from date of purchase of land and old building)Assessment by city for drainage project                                                                        1,600Hauling charges for delivery of machinery from storage                                                  620to new buildingInstallation of machinery                                                                                              2,000Trees, shrubs, and other landscaping after completion                                              5,400of building (permanent in nature)InstructionsDetermine the amounts that should be debited to Land, to Buildings, and to Machinery and Equipment. Assume the benefits of capitalizing interest during construction exceed the cost of implementation. Indicate how any costs not debited to these accounts be recorded.

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