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Please answer parts b, c and d of this question. Thank you. E10.4 ( LO2,3,7 ) (Treatment of Various Costs) Farrey Supply Ltd. is a
Please answer parts b, c and d of this question. Thank you.
E10.4 ( LO2,3,7 ) (Treatment of Various Costs) Farrey Supply Ltd. is a newly formed public corporation that incurred the following costs related to land, buildings, and machinery: a. Determine the amounts that should be included in the cost of land, buildings, and machinery. Indicate how any amounts that are not included in these accounts should be recorded. b. Assume that Farrey is not a public company, and that it prepares financial statements in accordance with ASPE. Would your solution to part (a) be affected? If so, how? c. From the perspective of a potential investor, what are the financial statement effects of capitalizing borrowing costs related to qualifying assets? d. What effects, if any, will the recording of purchases to an incorrect account (land, building, machinery, or any other property, plant, and equipment asset) have on the financial statements? Provide an exampleStep by Step Solution
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