to within or lead to pate or new names, company that often prod costs must be expensed as incurred. The excess of the cost ofa company overthe fair value ofthe assets net oven Do ITI 10 s For 2017, sale Company reported this period total assets of S30 of $340,000. income for beginning was ending total assets asset turnover for 2017. were $400,000. Compute the company's 1 The following expenditures relating to plant assets were made by Prather during the first 2 months of 2017. Paid $5,000 of accrued taxes at time plant site was acquired. 1. 2. cover possible accident loss on new factory machin w machinery was in transit. 3. Paid $850 sales taxes on new delivery truck. 4. Paid $17,500 for parking lots and driveways on new plant site. 5. Paid $250 to have company name and advertising slogan painted on new delivery 6. Paid $8,000 for installation of new factory machinery. 7. Paid $900 for one-year accident insurance policy on new delivery truck. 8. Paid $75 motor vehicle license fee on the new truck. Instructions (a) Explain the application of the historical cost principle in determining the acquisition cost of plant assets (b) List the numbers of the foregoing transactions, and opposite each indicate the account title to which each expenditure should be debited. E10-2 Benedict Company incurred the following costs 1. Sales tax on factory machinery purchased 5,000 2. Painting of and lettering on truck immediately upon purchase 3. Installation and testing of factory machinery 4. Real estate broker's commission on land purchased 5. Insurance premium paid for first year's insurance on new truck 6. Cost of landscaping on property purchased 7. Cost of paving parking lot for new building constructed 8. Cost of clearing, draining, and filling land 9, Architects fees on self-constructed building