A finished ACC-370 Topic 4 acquisition cost build-up schedule example, sorting every payment around a property and machine purchase into an asset or expense, each with its criterion. Searches like "acc 370 topic 4 assignment example", "acc370 topic 4 sample" and "acc-370 topic 4 example" land here.
What a finished ACC-370 Topic 4 acquisition cost build-up schedule looks like
The finished schedule is a table with one row per payment and one column for each destination, all amounts illustrative. The lump-sum $1,200,000 for land and building is split by relative appraised value, $450,000 against $1,050,000, which puts $360,000 in land and $840,000 in building. Paving the parking lot goes to land improvements, because it wears out and land does not. The machine column builds from the invoice net of the discount taken, then adds freight, sales tax, installation, the test run and insurance while in transit, reaching $89,000. Three payments are sent to expense instead: repairing damage from careless unloading, training the operators and insurance covering the months after the machine went into service. Beside every row sits the test applied, whether the cost was necessary to bring the asset to the condition and location for its intended use.
How an ACC-370 Topic 4 example is structured
Nothing is placed in a column before its facts are on the page. The schedule starts from the transactions listed in date order as a paragraph of facts, since deciding what each payment was for comes before deciding where it goes. The allocation of the lump-sum price follows, showing relative appraised values and the percentages they produce. A third part builds the machine's cost line by line, each addition paired with the reason it belongs. The fourth part handles the payments that do not belong, stating for each why it fails the test, including the damage that careful handling would have avoided. A fifth part separates land from land improvements and explains why only one of them is depreciated. The last part totals each column, reconciles the columns to the cash paid and presents the entry that records the assets, with the expensed items listed separately.
Lump-sum price split by appraisal
The single price for land and building is divided in proportion to their appraised values, which gives each asset a cost basis the depreciation schedule can use.
Machine cost built line by line
Freight, sales tax, installation and the test run are each added to the invoice net of discount, with a sentence explaining why each one is necessary.
Costs sent to expense with reasons
Unloading damage, operator training and post-installation insurance are excluded because none was needed to bring the machine to its working condition and location.
Land kept apart from its improvements
Paving is recorded as a land improvement with a finite life, while the land itself carries no depreciation, and the schedule states that difference directly.
Columns reconciled to cash paid
The column totals plus the expensed items equal the cash disbursed, a check that catches a payment counted twice or never placed at all.
Where marks go in ACC-370 Topic 4
Acquisition cost is marked item by item, and each misplaced item is simply wrong. Sending freight or installation to expense understates the asset and overstates the period's costs, and the error persists through every year of depreciation. Capitalizing operator training or the repair of avoidable damage records costs the asset did not need, and markers look for both because textbooks set them deliberately. A lump-sum price split in equal halves, or by the seller's asking figures, ignores relative fair value and produces a building cost the facts do not support. Parking lot paving recorded as land leaves a wearing asset undepreciated forever. Correct totals with no criterion beside each line often still cost credit, because what the topic examines is why a cost belongs as much as where it landed.
Get an ACC-370 Topic 4 example written to your instructions
Send the ACC-370 Topic 4 instructions, your rubric and the acquisition facts your section assigned. We write a custom example to them, with every payment sorted into its asset or expense column, the criterion stated beside each line, any lump-sum price allocated by relative value and the columns reconciled to cash, in 24 to 48 hours. The first one costs nothing.
ACC-370 Topic 4 questions, answered
What belongs in the cost of a machine?
Every cost necessary to acquire it and bring it to the condition and location for its intended use: the purchase price net of discounts, freight, sales tax, insurance while in transit, installation and testing. Costs that arise after it is ready, or that careful handling would have avoided, are expensed. Applying that test to each payment, rather than recalling a list, handles items the textbook never mentioned.
How is a lump-sum purchase allocated?
By relative fair value, most often appraised values at the date of purchase. Each asset's share of the combined fair value is applied to the total price paid, so if land is worth 30 percent of the appraised total it receives 30 percent of the cost. The split matters because land is not depreciated and a building is, so the allocation changes every future year's expense.
Is demolition of an old building part of land cost?
When land is bought with a building the company intends to demolish, the cost of removing it, less any salvage, is generally added to the cost of the land, since clearing the site is part of getting it ready for its intended use. The facts in this example involve a building the company keeps, so the example notes that the question does not arise here.