Acc291 Accounting Principles: E10-2 Fluffer Company incurred the following costs
Acc291 Accounting Principles E10-2 Fluffer Company incurred the following costs. 1. Sales tax on factory machinery purchased, $7,000. 2. Painting of and lettering on truck immediately upon purchase, $800. 3. Installation and testing of factory machinery, $2,500. 4. Real estate broker’s commission on land purchased $4,500. 5. Insurance premium paid for first year’s insurance on new truck $930. 6. Cost of landscaping on property purchased, $9,200. 7. Cost of paving parking lot for new building, $18,700. 8. Cost of clearing, draining, and filling land, $14,400. 9. Architect’s fees on self-constructed building, $11,000. Instructions: a) Indicate to which account fluffer would debit each of the costs. b) Explain why item 1 is not debited to an expense account. c) Explain why items 7 and 8 are debited to different accounts.
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