Capitalized costs for long-term assets (Learning Objective 2) 10–15 min.

Ramirez Transfer manufactures conveyor belts. Early in August 2015, Ramirez Transfer constructed its own building at a materials, labor, and overhead cost of $1,250,000.

Ramirez Transfer paid cash for the construction costs. Ramirez Transfer also paid for architect fees and building permits of $82,000.

Requirements 1. How much should Ramirez Transfer record as the cost of the building in 2015?

2. Record Ramirez Transfer’s transactions related to the construction of the building.

AppendixLO1