Question

Question: Indicate where the following items would be shown on a balance sheet. (a) A lien that was attached to the land when purchased. (b) Landscaping costs. (c) Attorney’s fees and recording fees related to purchasing land. (d) Variable overhead related to construction of machinery. (e) A parking lot servicing employees in the building. (f) Cost of temporary building for workers during construction of building. (g) Interest expense on bonds payable incurred during construction of a building. (h) Assessments for sidewalks that are maintained by the city. (i) The cost of demolishing an old building that was on the land when purchased.

Short answer

Answer

Land: (a), (c), (h) and (i)

Land improvement: (b) and (e)

Building: (f) and (g)

Machinery: (d)

Step-by-step solution

Plant assets in balance sheet

Land, land improvement, building and machinery all are the part of the plant assets. In balance sheet these plant assets shown under the sub head tangible assets and head property plant and equipment of the assets.

Acquisition cost of machinery and equipment

S. No	Particulars	Part of balance sheet
(a)	Lien included in land	Land
(b)	Cost of landscaping	Land improvement or land depending upon life
(c)	Recoding fees and attorney fees	Land
(d)	Variable overhead incurred in machinery construction	Machinery
(e)	Parking lot for employees in building	Land improvement
(f)	Cost incurred on temporary building	Building
(g)	Interest paid on bonds incurred for building construction	Building
(h)	Sidewalk assessment	Land
(i)	Cost of destroying old building	Land