Case #$2$

A company may acquire property, plant, equipment, and intangible assets for cash, in exchange for a deferred payment contract, by exchanging other assets, or by a combination of these methods.

Identify six types of costs that should be capitalized as the cost of a parcel of land. For your answer, assume that the land has an existing building that is to be removed in the immediate future so that a new building can be constructed on the site.

At what amount should a company record an asset acquired in exchange for a deferred payment contract?

In general, at what amount should assets received in exchange for other nonmonetary assets be valued? Specifically, at what amount should a company value a new machine acquired by exchanging an older, similar machine and paying cash?