Closser-Gomez, Inc. is a construction company that regularly buys large tracts of land for use in very large housing developments.
Closser-Gomez owns a number of major assets including an office complex in San Antonio, three warehouse/vehicle depot facilities located throughout the south Texas area. Within two of these warehouses they keep twelve large dump trucks and five bulldozers used for preparing tracts of land.
The third warehouse (the largest) is used as a storage facility for minerals and other sellable items gained from the land Closser-Gomez purchases. These items like iron-ore, coal, timber, and transported to the facility when found on-site (and when economically feasible for extraction) for sale as a way to offset the development costs of the communities they build.
In addition to the above items Closser-Gomez also owns over forty sets of blueprints to different home designs that were purchased from C. Tigh Architectural Designs in Houston, Texas. As owners of the blueprints Closser-Gomez maintains the exclusive legal right to build those home designs until the legal protection afforded on those designs expires.
Last week the Closser-Gomez assistant bookkeeper got married and decided to move with their new spouse to San Francisco and you’ve been hired to replace the bookkeeper.
In consideration of the situation regarding the assets of Closser-Gomez, please post a discussion response addressing the following questions.
1.How would each of the assets listed be classified in regard to the three PP&E categories?
2.What methods of allocating their costs of purchase or production would be used for each category? Describe these methods in detail and note variations in calculation methods that may be used.
3.What are the benefits of allocating the costs of these asset’s costs over their useful life?
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