Question

1. what cost are included in the cost of the plant asset?

2. what costs are included in the cost of land?

3. what is a building and what costs are included in the cost of the building?

4. what is equipment and what costs are included in the cost of equipment?

5. what type of cost are immediately recorded as an expense?

Answer 1

1) Cost included in cosst of plant asset are purchase price of the plant and the expenses which incured to bring that plant toinitial use.

2)Land cost include the purchase price of land.Land purchases often involve real estate commissions , legal fees, bank fees, title search fees, and similar expenses associated with it.

3) Building means , usually roofed and walled structure built for permanent use or the art or business of assembling materials into a structure. The cost of building include all the construction cost and the expenses for the initial use of building and when any additional expenses increased the capasity of that also considered inj the cost of building.

4)Equipment means the set of articles or physical resources serving to equip a person or thing such as the implements used in an operation or activity ,all the fixed assets other than land and buildings of a business enterprise and the rolling stock of a railway etc..

The cost considered are includes the purchase price, sales taxes, transportation fees, insurance paid to cover the item during shipment, assembly, installation, and all other costs associated with making the item ready for use.

5)The cost which will not increase the capasity of the particular asset like repairing or others are immediately recognised as expense.