Indicate whether each of the following expenditures should be classified as land, land improvements, buildings, equipment, or none of these. 1. Parking lots 2. Electricity used by a machine 3. Excavation costs 4. Interest on building construction loan 5. Cost of trial runs for machinery 6. Drainage costs 7. Cost to install a machine 8. Fences 9. Unpaid (past) property taxes assumed 10. Cost of tearing down a building when land and a building on it are purchased

The costs which are related to the land, land improvements, buildings, equipment are classified and if none of the cost is not related than it would be consider as none of these. The classification is shown below:

1. Parking lots - Land improvements

2. Electricity used by a machine - None of these

3. Excavation costs - Building

4. Interest on building construction loan - Building

5. Cost of trial runs for machinery - equipment

6. Drainage costs - land

7. Cost to install a machine - equipment

8. Fences - Land improvement

9. Unpaid (past) property taxes assumed - land

10. Cost of tearing down a building when land and a building on it are purchased - land

azikennamdi azikennamdi · Answer 2 · 2022-03-29T14:20:36+02:00

The exercise has to do with the classification of Costs. The expenditure is correctly classified below.

How are the various costs above classified?

The costs are classified as follows:

Parking lots - Land Improvements
Electricity used by a machine - None of the above
Excavation costs - Land Improvement
Interest on building construction loan - None of the above
Cost of trial runs for machinery - None of the above
Drainage costs - Land improvement
Cost to install a machine - None of the above
Unpaid (past) property taxes assumed - None of the above
Cost of tearing down a building when land and a building on it are purchased - Land improvement.

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