the total cost of equipment.
Q: On Jan. 1, 2021, Manama Company purchased an equipment at a price of $100,000 and paid tax of 10% of…
A: This question deals with the IAS 16 "Property, plant and equipment" As per IAS, an item of property,…
Q: On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $41,000 in…
A: Solution: Cost of land to be reported = $377,305 Cost of land = cash paid to acquire land +…
Q: factory equipment for $850,000. In addition, it paid $82,000 in sales tax and $7,000 in installation…
A: Calculation of Purchase price of equipment: Equipment price = $850,000 Add: Sales…
Q: Velasquez Company sold an item of equipment costing P3,800,000 to Vince for P5,000,000. 20%…
A: Answer: (850,000). Explanation: According to question, Cost of equipment= P3,800,000. Sale price of…
Q: O'Connor Company ordered a machine on January 1 at a purchase price of $95,000. On the date of…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: Grab Manufacturing Co. purchased a ten-ton draw press at a cost of $180,000. Since the company made…
A: Any amount of money spent to generate the revenues in a business is known as expenses.
Q: On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $41,000 in…
A: Solution:- Calculation of the cost of land reported on the balance sheet as follows:-
Q: Solo Company purchased a new piece of equipment with a list price of $175,000 and subject to a 5…
A: A capitalized cost is an expense that is added to the cost basis of a fixed asset on a company's…
Q: Blake furniture recently purchased new equipment for its plant. The list price of the equipment was…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: On July 1, Twin Pines Co., a water distiller, acquired new bottling equipment with a list price…
A:
Q: Cala Manufacturing purchases land for $317,000 as part of its plans to build a new plant. The…
A: Here in this question we are required to prepare single entry for purchasing land its improvement…
Q: Wake Coffee Co. has a piece of equipment no longer needed for production. The company purchased the…
A: Introduction:- A piece of machinery at Wake Coffee Co. is no more in use. The machinery was…
Q: HP Company purchased equipment on January 1 at a list price of $127,000, with credit terms 2/10,…
A: Equipment cost includes all cost such as - installation charges , slab rate charge , taxes etc.…
Q: Abby Corporation acquired a new processing machine. Details of the acquisition are as follows:…
A: Capitaliztion is defined as the procedure of converting the stream of income to the capital value of…
Q: A company incurred the following costs for a new delivery truck: Purchase price $148,000 Sales…
A: Cost of asset is the amount at which the asset is bought by the entity from the market. It, not only…
Q: Blake furniture recently purchased new equipment for its plant. The list price of the equipment was…
A: In accounting, consistency is defined as an accounting principles of the company over the period of…
Q: On July 1, Lewis Co. acquired a new computer with a list price of $125,000. Lewis receivelr trade-in…
A: Trade in allowance is the value received by the buyer for exchanging one asset to purchase another…
Q: a. Do you agree that depreciation is often considered as major source of funds? Why? b. Which…
A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: The accountant at industrial system Incorporated (ISI) decided to depriciate some new production…
A: The question is related to Cost of Asset and Depreciation Accounting. The company purchased three…
Q: to the tax authorities. Explain how both of these
A: Note: Since you have posted a question with multiple sub-parts, we will solve first three subparts…
Q: Johnson Industries purchased a metal-working lathe for $32,000. This item will be used for business…
A: The depreciable base for the calculation of depreciation is the amount of cost applicable to the…
Q: Cala Manufacturing purchases land for $327,000 as part of its plans to build a new plant. The…
A: The cost of an asset includes all the cost that makes the assets ready to use. So the cost of tear…
Q: Beaverton Lumber purchased milling equipment for $35,000. In addition to the purchase price,…
A: Particulars Amount Purchase cost $35,000 Add: Freight $1,500 Add: Installation $3,000…
Q: Blake furniture recently purchased new equipment for its plant. The list price of the equipment was…
A: Depreciation means decrease in the value of an Asset overtime due to its wear and tear. It means the…
Q: Cala Manufacturing purchases land for $259,000 as part of its plans to build a new plant. The…
A: Cost of land=Purchase value+Tear down of old building+Cost of…
Q: Wildhorse Co. purchased equipment on January 1 at a list price of $155000, with credit terms 3/10,…
A: Compute the total cost of new equipment:
Q: Cala Manufacturing purchases land for $297,000 as part of its plans to build a new plant. The…
A: A Journal entry is a primary entry that records the financial transactions initially. The…
Q: Newnan Furniture owns and operates an industrial lift truck in its warehousing operation. The record…
A: Computation:
Q: Abby Corporation acquired a new processing machine. Details of the acquisition are as follows:…
A: Abby corporation's Acquired new processing machine = P300000 1. Invoice cost = P300000 Discount on…
Q: amela Company acquired a welding machine on account with an invoice price of P5,000,000 subject to a…
A: Depreciation under the Straight Line method is computed under the following method: Depreciation =…
Q: eele Corp. purchases equipment for $25,000. Regarding the purchase, Steele recorded the following…
A: Solution: Purchase price = $25,000 Shipping = $1,000 Installation fees = $2,000 Discount = 5% on…
Q: On August purchased 1, 2004, Witten Corporation a new machine on a deferred payment basis. A down…
A: Answer - Calculation of Amount to be Capitalized : Particulars Amount Cash Equivalent Price of…
Q: P Company purchased equipment on January 1 at a list price of $127,000, with credit terms 2/10,…
A: Cost of assets includes purchase price , taxes (if credit not available) , installation charges or…
Q: A small industrial contractor purchased a warehouse building for storing equipment and materials…
A: The question is based on the concept of loan amortization of cost of building. The loan will be paid…
Q: Worf Co. both purchases and constructs various equipment it uses in its operations. The following…
A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…
Q: On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $44,000 in…
A: Land forms a part of assets of the entity and represent the resources that assist the business in…
Q: Abby Corporation acquired a new processing machine. Details of the acquisition are as follows:…
A: A fixed asset is the asset which is held for use in the operations or for other administrative uses.…
Q: In January, Hunter Corporation entered into a contract to acquire a new machine for its factory. The…
A: Step 1 The total cost of the assets is not only the purchase price but also any cost incurred to…
Q: Ebasan Compary acquired a new machine with an invoice cost of P1,600,000, Ebasan incurred…
A: Cash allowance to Chief engineer shall not be adjusted in the cost of machine. Gratuity to the…
Q: Cala Manufacturing purchases land for $390,000 as part of its plans to build a new plant. The…
A: Introduction: A compound journal entry is a journal entry where there are more than two accounts…
Q: Kemp Inc. acquired a new processing machine: Invoice cost P1,800,000 Transportation cost…
A: The cost of acquisition of the asset includes the following: Net Purchase cost of the asset…
Q: Prophet Company signed a long-term purchase contract to buy timber from the U.S. Forest Service at…
A: Ethical issues arise when some circumstances, events or actions result in a conflict with generally…
Q: O’Connor Company ordered a machine on January 1 at a purchase price of $40,000. On the date…
A: 1. Indicate the effects (accounts, amounts, and 1 or 2 ) of each transaction (on January 1, 2, 3,and…
Q: Oaktree Company purchased new equipment and made the following expenditures: Purchase price Sales…
A: Cost of the Equipment = Purchase Price + Sales Tax + Freight Charges for shipment of machine +…
Q: UPS purchased a six-acre tract of land in Columbia, SC and an existing building for $500,000. The…
A: The property plant and equipment include long-term assets. The land is also a long-term asset. When…
Q: Cala Manufacturing purchases land for $459,000 as part of its plans to build a new plant. The…
A: The cost incurred to tear the old building on land and fill and level the lot at the time of…
Q: A restaurant chain purchases a two-acre tract of land and an existing building for $500,000. The…
A: Capitalization of expenses:-It means recorded of cost or expenses in the balance sheet incurred in…
Q: The following data relate to a firm's purchase of a machine used in the manufacture of its product:…
A: Total acquisition cost = Invoice price + Sales tax - Cash discount + Feight + Insurance cost while…
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Glassworks Co. acquired equipment for 896,000 inclusive of 96,000 refundable purchase tax. A cash discount of 24,000 was available but Glassworks deferred the payment until the end of the credit term. Glassworks incurred freight and installation costs of 40,000. Three weeks after he equipment was installed and used in Glassworks'main office, Glassworks relocated the equipment to one of its branches incurring relocation and reinstallation cost of 50,000.
Requirement: Compute for the total cost of equipment.
Step by step
Solved in 3 steps
- Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.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?Dorothea Company acquired several fixtures for its new building, including display cases, shelves and hanging racks. The invoice price of the fixtures was P700,000. The entity received a 2% cash discount by paying within the discount period. Freight and insurance during shipment totaled P3,000. Costs of assembling and installing fixtures were 5,000. While installing a display case, a new employee carelessly broke a glass top. This top was replaced at a cost of P2,000. What total amount should be recorded as cost of the fixtures?
- Blake furniture recently purchased new equipment for its plant. The list price of the equipment was $40,000. Company paid sales taxes of $2,100 at the date of purchase. Freight charges for the equipment totaled $680. Installation and training costs related to the equipment amounted to $900. During installation, one of the pieces of equipment was accidentally damaged It cost $400 to repair this damage. Blake furniture will depreciate this equipment by straight-line method with half-year convention over an estimated useful life of 3 years assuming a $3,000 scrap value. a. Prepare depreciation schedule. b. Give reasons for switching to straight line method in both the accelerated methods. c. Management wants to report the highest possible earnings in its financial statements, yet it also wants to minimize its taxable income reported to the tax authorities. Explain how both of these objectives can be met. d. Do you agree that depreciation is often considered as major source of funds?…Blake furniture recently purchased new equipment for its plant. The list price of the equipment was $40,000.Company paid sales taxes of $2,100 at the date of purchase. Freight charges for theequipment totaled $680. Installation and training costs related to the equipment amounted to $900. During installation, one of the pieces of equipment was accidentally damaged by an employee. It cost $400 to repair this damage. Blake furniture will depreciate this equipment by the straight-line method (half-year convention) and 150% declining balance method over an estimated useful life of 4 years assuming a $3,000 scrap value. Prepare depreciation schedulesBlake furniture recently purchased new equipment for its plant. The list price of the equipment was $40,000. Company paid sales taxes of $2,100 at the date of purchase. Freight charges for theequipment totaled $680. Installation and training costs related to the equipment amounted to $900. During installation, one of the pieces of equipment was accidentally damaged It cost $400 to repair this damage. Blake furniture will depreciate this equipment by straight-line method with half-year convention over an estimated useful life of 3 years assuming a $3,000 scrap value. a. The only accurate way to account for the success or failure of an entity is to accumulate alltransactions from the opening of business until the business eventually liquidates. Comment andexplain whether this is true or not. Moreover, how do you think the concept of consistency aidin the analysis of financial statements? What type of accounting disclosure is required if thisconcept is not applied?
- Blake furniture recently purchased new equipment for its plant. The list price of the equipment was $40,000.Company paid sales taxes of $2,100 at the date of purchase. Freight charges for theequipment totaled $680. Installation and training costs related to the equipment amounted to $900. During installation, one of the pieces of equipment was accidentally damaged by an employee. It cost $400 to repair this damage. Blake furniture will depreciate this equipment by the straight-line method (half-year convention) and 150% declining balance method over an estimated useful life of 4 years assuming a $3,000 scrap value. Prepare depreciation schedules. Give reasons for switching to straight line method in both the accelerated methods. Management wants to report the highest possible earnings in its financial statements, yet it also wants to minimize its taxable income reported to the tax authorities. Explain how both of these objectives can be met. Depreciation is often considered as…Blake furniture recently purchased new equipment for its plant. The list price of the equipment was $40,000. Company paid sales taxes of $2,100 at the date of purchase. Freight charges for theequipment totaled $680. Installation and training costs related to the equipment amounted to $900. During installation, one of the pieces of equipment was accidentally damaged It cost $400 to repair this damage. Blake furniture will depreciate this equipment by straight-line method with half-year convention over an estimated useful life of 3 years assuming a $3,000 scrap value. a. Do you agree that depreciation is often considered as major source of funds? Why? b. Which tangible assets are depreciated and which are not, why? c. A rental agency collects rent in advance. Why the rent is collected treated as a liability/asset? Inwhich category this liability/asset will be classified into and how would you record it? Where should it appear in the financial statements? d. The only accurate way to…Solo Company purchased a new piece of equipment with a list price of $175,000 and subject to a 5 percent discount if paid within 45 days. H. Solo paid within the discount period. The company also paid $1,500 to obtain title to the equipment and $600 as the license fee for the first year of operation. It paid $2,500 to level the area in which the equipment would be located and $12,500 to relocate other equipment that would have interfered with the proper operation of the new equipment. H. Solo paid $400 for property and liability insurance for the first year of operation. What is the acquisition cost of this equipment that H. Solo should record in its accounting records?
- Bach Co., a VAT-registered business, acquired a piece of equipment for P224,000 on account. The purchase price is inclusive of 12% VAT. A P4,480 prompt payment discount is available on purchase, but Bach Co. opted not to take it. Bach Co. also incurred P20,000 cost of training the personnel who will be operating the equipment. Two months after the equipment was installed, Bach Co. decided to redeploy the equipment to another location. Bach Co. incurred P30,000 in the relocation and reinstallation. The cost of the equipment is a. 245,520. b. 230,000. c. 204,480. d. 195,520.Lavoie Corporation acquired new equipment at a cost of $100,000 plus 7% provincial sales tax and 5% GST. (GST is a recoverable tax.) The company paid $1,700 to transport the equipment to its plant. The site where the equipment was to be placed was not yet ready and Lavoie Corporation spent another $500 for one month's storage costs. When installed, $300 in labour and $200 in materials were used to adjust and calibrate the machine to the company's exact specifications. The units produced in the trial runs were subsequently sold to employees for $400. During the first two months of production, the equipment was used at only 50% of its capacity. Labour costs of $3,000 and material costs of $2,000 were incurred in this production, while the units sold generated $5,500 of sales. Lavoie paid an engineering consulting firm $11,000 for its services in recommending the specific equipment to purchase and for help during the calibration phase. Borrowing costs of $800 were incurred because of the…HP Company purchased equipment on January 1 at a list price of $127,000, with credit terms 2/10, n/30. Payment was made within the discount period and Yocum was given a $21,400 cash discount. Yocum paid $6,000 sales tax on the equipment, and paid installation charges of $11,760. Prior to installation, Yocum paid $4,000 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment? Select one: a. $123,600 b. $125,360 C. $131,760 d. $129,36 e. The answer does not exist Previous page Next page