Lax Company recently acquired two items of equipment. The transactions are described as follows: * * Acquired a press at an invoice price of P3,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment were P50,000 and installation cost amounted to P200,000. Acquired a welding machine at an invoice price of P2,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000. The increase in the equipment account as a result of the above transactions should be a. 4,900,000 b. 5,000,000 c. 5,100,000 d. 5,200,000.

Lax Company recently acquired two items of equipment. The transactions are described as follows: * * Acquired a press at an invoice price of P3,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment were P50,000 and installation cost amounted to P200,000. Acquired a welding machine at an invoice price of P2,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000. The increase in the equipment account as a result of the above transactions should be a. 4,900,000 b. 5,000,000 c. 5,100,000 d. 5,200,000.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5EA: Steele Corp. purchases equipment for $25,000. Regarding the purchase, Steele recorded the following...

See similar textbooks

Similar questions

Siargao Company recently acquired two items of equipment. Acquired a press at an invoice price of P3,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment v P50,000 and installation cost amounted to P200,000. were Acquired a welding machine at an invoice price of P2,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000. What is the total initial amount to be capitalized as the cost of themachineries?
Pasado Company recently acquired two items of equipment.• Acquired a press at an invoice price of P3,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment were P50,000 and installation cost amounted to P200,000.• Acquired a welding machine at an invoice price of P2,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000.What is the total increase in the equipment account as a result of the transactions?
CONGRATULATIONS Company recently acquired two items of equipment. • Acquired a press at an invoice price of P2,000,000 subject to a 5% cash discount which was taken. Cost of freight and insurance during shipment were P150,000 and installation cost amounted to P100,000. • Acquired a welding machine at an invoice price of P3,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000. What amount should be reported as total increase in the equipment account as a result of the transactions?
GRACE Co. recently acquired two items of equipment. Acquired a press at an invoice price of P5,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment were P50,000 and installation cost amounted to P200,000. The cost of testing the equipment is P50,000 while the administration cost has amounted to P30,000. Acquired a welding machine at an invoice price of P3,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000. Required: What is the total increase in the equipment account as a result of the transactions?
Siargao company recently acquired two items of equipment. A. Acquired a press at an invoice price of Php3,000,000 net of 5% cash discount which was taken. Cost of freight and insurance during the shipment were Php50,000 and installation cost amounted to Php200,000 B. Acquired a welding machine at an invoice price of Php2,000,000 subject to a 10% cash discount which was not taken and a 5% rebate which was also not taken. Additional welding supplies were acquired at a cost of Php100,000. What is the total increase in the equipment account as a result of these transactions?
Abby Corporation acquired a new processing machine. Details of the acquisition are as follows: Invoice cost, terms, 5% discount if payment is made in 30 days. The company did pay within the discount period, P300,000, Cost of transporting the machine to the corporation's factory, P5,000. Cost of installation (which includes additional P2,000 incurred due to negligence of the workers), P11,000. The corporation's chief engineer spent one-fourth of his time during trial runs of the new machine, his monthly salary is P22,000. The company paid P1,000 for removing the old machine. (The old machine was sold for less than its book value.) At what amount should Abby Corporation capitalize the new processing machine?
ABC Co purchased an equipment from Hongkong for P100,000. Additional cost included the following: Broker's commission P5,000 Import duties P30,000 Freight on purchase P1,000 Installation cost P3,500 Testing of equipment prior to use P5,000 Promotion and advertising cost of the new product to be processed in using the new equipment, P8,000 Samples generated from testing the equipment were sold for P500. The entry related to the above transaction will include: Cr Cash 144,500 Dr Selling Expenses 8,000 Dr Equipment 152,000 Cr Sales 500
ABC Co. acquired a new machine. Details of the acquisition are as follows:Cash paid for machine including VAT of ₱60,000 560,000Royalty payment based on units produced 19,000Cost of transporting machine 15,000Cost of installation by expert fitter 40,000Labor of testing machine 20,000Materials used and damaged as a result of testing the machine 10,000Repair cost of new machine damaged in the process of installation 12,000Cost of training for personnel who will use the machine 25,000Cost of safety rails and platforms surrounding machine 50,000Cost of water device to keep machine cool 70,000Cost of adjustment to machine to make it operate more efficiently 75,000Estimated dismantling cost to be incurred as required by contract 67,000Cost of removing old machine 10,000Loss on premature retirement – old machine 120,000Gratuity paid to operator of old machine, who was laid off 20,000Required: Compute for the cost of the new machine.
The following data relate to a firm's purchase of a machine used in the manufacture of its product: Invoice price $20,000 Applicable sales tax Cash discount taken for prompt payment 1,200 400 Freight paid 260 Cost of insurance coverage on machine while in transit 125 Installation costs 1,000 Testing and adjusting costs 475 Repair of damages to machine caused by the firm's employees 550 Prepaid maintenance contract for first year of machine's use 300 Determine the acquisition cost of the machine. $ 23,510
nt Oaktree Company purchased new equipment and made the following expenditures: Purchase price Sales tax $46,000 2, 300 Freight charges for shipnent of equipnent Insurance on the equipnent for the first year Installation of equipment 71e 910 1,100 The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Prepare the necessary journal entries to record the above expenditures. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet > Record the purchase of equipment. Note: Enter debits before credits. Transaction General Journal Debit Credit Journal entry worksheet 11 Record any expenditures not capitalized in the purchase of equipment. Note Peter Oebits before credita Transaction General Journal Debit Credit 21
XYZ Corp. acquired a new equipment. It had the following details: Invoice price of the machinery P 2,000,000 Trade discount 3% Cash discount but not taken 50,000 Freight 60,000 Cost of removing old machinery 30,000 Carrying value of the old equipment 300,000 Loss on retirement of equipment 70,000 Dismantling cost of old equipment (estimated atthe beginning and incurred on date ofdismantling) 50,000 Installation cost of new machinery 60,000 1. What is the capitalized cost of the new machinery?
Oaktree Company purchased new equipment and made the following expenditures: Purchase price $45,000 2,200 Sales tax Freight charges for shipment of equipment Insurance on the equipment for the first year Installation of equipment 700 900 1,000 The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Prepare the necessary journal entries to record the above expenditures.