Question: 1. Mrs. Harcross is uncertain about how the historical cost principle applies to plant assets. Explain the principle to Mrs. Harcross.
2. How is the cost for a plant asset measured in a cash transaction? In a noncash transaction?
3. Barrister Company acquires the land and building owned by Ansel Company. What types of costs may be incurred to make the asset ready for its intended use if Barrister Company wants to use only the land? If it wants to use both the land and the building?