Determine asset costs from various possible components Determine the costs that would appear on the balance sheet of Smith Co. Ltd, in relation to land and a building, based on the following information:

$

Purchase price of plant site 175 000 Building materials (includes $10 000 in materials wasted because of worker inexperience) 700 000 Machinery installation charges 40 000 Grading and draining plant site 20 000 Labour costs of construction (Smith Co. used its own workers to build the plant rather than laying them off because business was slack. However, the labour to build the plant cost $40 000 more than outside contractors would have charged, because of inside workers’ inexperience and inefficiency.)

500 000 Machinery purchase cost 1 000 000 Machinery delivery charges 10 000 Parking lot grading and paving 60 000 Replacement of building windows shot out by vandals before production start-up 7 000 Architect’s fees 40 000