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[ | Question 36 3/3pts On January 1, 2017, Henri's World's Famous Commercial Chicken purchased a new AN-109 industrial fryer used in the preparation of fried chicken. The purchase cost for the fryer was $250,000. Shipping costs was an additional $5,000, and the cost to install the industrial fryer added another $19,000 to its costs. Annual maintenance costs for the new industrial fryer was estimated be about $2,500 per year. In May 2022 the owner, Henri Polloberger, became aware of a new technology that offered many advantages over the AN-109 fryer and decided to replace it. On June 30, 2022 the AN-109 was un-installed and sold to Chicos, Inc. for $70,000. The AN-109 had been depreciated on a straight-line basis assuming a useful life of 10 years and an estimated $10,000 salvage value. Based on the information provided, what was the amount of the Gain or Loss that Henri's World's Famous Commercial Chicken recognized on the sale of this asset? Note that Henri's World's Famous Commercial Chicken uses the calendar year as its fiscal year. Problem Counts 3 Points $64,000 loss $48,000 gain * $58,800 loss $83,125 loss $64,000 gain Downloaded by Shubh kh (shubhkhose.sk@gmail.com) Question 37 0/4pts Vineyard Wines Financial Problems Counts 4 Points Each The next five questions are all based on the following 2021 fiscal year end account information for Vineyard Wines, national distributor of lower quality wines and Sangria. The financial data below can be used to develop a set of Financial Statements (Income Statement, Balance Sheet, and Owner's Equity calculation) for fiscal 2021. HOWEVER, the individual questions can be answered simply by classifying the appropriate accounts and adding (or subtracting) the accounts together. How you approach this problem is up to you. Note that Vineyard Wines has three product lines: Sangria, Chardonnay, and Pinot. Sales returns and small discounts are allowed for all product lines. Accounts Payable $257,600 $27,000 $338,000 Dividends Payable Bonds Payable Salaries Payable $62,500 Accounts Receivable $588,300 Advertising Expense $54,000 Cash $193,917 Downloaded by Shubh kh (shubhkhose.sk@gmail.com)
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On June 30, 2024, Prego Equipment purchased a precision laser-guided steel punch that has an expected capacity of 300,000 units and no residual value. The cost of the machine was $450,000 and is to be depreciated using the units-of-production method. During the six months of 2024, 24,000 units of product were produced. At the beginning of 2025, engineers estimated that the machine can realistically be used to produce only another 230,000 units. During 2025, 70,000 units were produced.
The company would report depreciation in 2024 of:
$36,000.
$43,900.
$18,000.
$21,950.
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On September 10, 2020, Vaughn Manufacturing incurred the following costs for one of its printing presses:
Purchase of attachment
$58500
Installation of attachment
5400
Replacement parts for renovation of press
15200
Labor and overhead in connection with renovation of press
6500
Neither the attachment nor the renovation increased the estimated useful life of the press. However, the renovation resulted in significantly increased productivity. What amount of the costs should be capitalized?
$85600.
$0
$79100.
$70400.
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GKD Construction purchased a truck 6 years ago at a cost of $71600. Because the old truck required an overhaul of $4100 last year,
and repairs of $2500 are needed in the current year, the company is now planning to purchase a new truck to replace the old one. The
old truck has a trade-in value of $5400. The cost of the new truck is $82400.
What amount of these costs represent sunk costs?
$83600
O $71600
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SUP
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P10-7 Self-Construction Olson Machine Company manufactures small and large milling machines. Selling prices of these machines range from $35,000 to $200,000. During the 5-month period from August 1, 2019, through December 31, 2019, Olson manufactured a milling machine for its own use. This machine was built as part of the regular production activities. The project required a large amount of time from planning and supervisory person-nel, as well as that of some of the company’s officers, because it was a more sophisticated type of machine than the regular production models.
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1. Reveille, Inc., purchased Machine #204 on April 2021, and placed the machine into production on April 3, 2021. The following information is relevant to Machine #204:Price P60,000Freight-in costs 2,500Preparation and installation costs 3,900Labor costs during regular production operation 10,200Credit terms 2/10, n/30Total productive output 138,500 unitsThe company expects that the machine could be used for 10 years, after which the salvage value would be zero. However, Reveille, Inc., intends to use the machine only eight years, after which it expects to be able to sell it for P9,800. The invoice for Machine #204 was paid April 10, 2021. The number of units produced in 2021 and 2022 were 23,200 and 29,000, respectively. Reveille computes depreciation to the nearest whole month.Required Compute the depreciation for the years indicated, using the following methods (round your answer to the nearest peso): 1. 2021: Units of productions2. 2022: Sum-of-the-years’- digits method 2. The…
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im Kwon Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $75,200, the accumulated depreciation is $30,100, its remaining useful life is five years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $156,400. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations:
Present Operations
Proposed Operations
Sales
$238,400
$238,400
Direct materials
$81,200
$81,200
Direct labor
56,400
—
Power and maintenance
5,300
27,800
Taxes, insurance, etc.
1,900
6,200
Selling and administrative expenses
56,400
56,400
Total expenses
$201,200…
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Required information
Skip to question
[The following information applies to the questions displayed below.]
Fancy Furniture produced a batch of 2,000 coffee tables at a cost of $355,000. It was discovered that the entire batch was finished improperly. Fancy can sell the tables as seconds for $305,000 or spend an additional $315,000 to refinish them and sell them for $605,000.
In deciding whether to rework the tables or sell them as is, management should:
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On June 18, 2017, Dell Printing Co. incurred the following costs for one of its printing presses: Purchase of
collating and stapling attachment $84,000 Installation of attachment 36,000 Replacement parts for
overhaul of press 26,000 Labor and overhead in connection with overhaul 14,000 The overhaul resulted in
a significant increase in production. Neither the attachment nor the overhaul increased the estimated
useful life of the press. What amount of the above costs should be capitalized? $120,000 $84,000
$160,000 $0
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Pigs-R-Us is trying to decide whether or not to automate their meat packing process. The machine costs $200,000, has a useful life of 10 years and a salvage value of $10,000. It will require a $60,000 overhaul after 5 years of use. The machine costs $9,000 per year to operate and maintain, but it will save the company $50,000 per year in labor costs. Pigs-R-Us has asked you to evaluate the economics of this purchase and tell them what do to. If their MARR is 14%, what would you recommend? Use External Rate of Return Method.
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Required information
[The following information applies to the questions displayed
below.]
University Car Wash purchased new soap dispensing equipment
that cost $249,000 including installation. The company estimates
that the equipment will have a residual value of $25,500. University
Car Wash also estimates it will use the machine for six years or
about 12,500 total hours. Actual use per year was as follows:
Year
1
2
Year
1
2
3
4
5
6
Total
23456
3
4
5
6
Hours
Used
2,900
1,800
1,900
2,100
1,900
1,900
2. Prepare a depreciation schedule for six years using the double-declining-
balance method. (Do not round your intermediate calculations.)
UNIVERSITY CAR WASH
Depreciation Schedule-Double-Declining-Balance
End of Year Amounts
Depreciation Accumulated
Expense
Depreciation
Book Value
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Kim Kwon Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $77,800, the accumulated depreciation is $31,100, its remaining useful life is five years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $161,800. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations:
Present Operations
Proposed Operations
Sales
$246,600
$246,600
Direct materials
$84,000
$84,000
Direct labor
58,400
—
Power and maintenance
5,400
28,800
Taxes, insurance, etc.
1,900
6,500
Selling and administrative expenses
58,400
58,400
Total expenses
$208,100…
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shobha
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Kim Kwon Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $94,400, the accumulated depreciation is $37,800, its remaining useful life is five years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $196,400. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations:
Present Operations
Proposed Operations
Sales
$299,200
$299,200
Direct materials
$102,000
$102,000
Direct labor
70,800
—
Power and maintenance
6,600
34,900
Taxes, insurance, etc.
2,400
7,800
Selling and administrative expenses
70,800
70,800
Total expenses
$252,600…
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Kim Kwon Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $80,700, the accumulated depreciation is $32,300, its remaining useful life is 5 years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $167,900. The automatic machine has an estimated useful life of 5 years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations:
PresentOperations
ProposedOperations
Sales
$255,800
$255,800
Direct materials
$87,200
$87,200
Direct labor
60,500
—
Power and maintenance
5,600
29,900
Taxes, insurance, etc.
2,000
6,700
Selling and administrative expenses
60,500
60,500
Total expenses
$215,800
$184,300…
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Manshukh
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Related Questions
- barrow_forwardq On June 30, 2024, Prego Equipment purchased a precision laser-guided steel punch that has an expected capacity of 300,000 units and no residual value. The cost of the machine was $450,000 and is to be depreciated using the units-of-production method. During the six months of 2024, 24,000 units of product were produced. At the beginning of 2025, engineers estimated that the machine can realistically be used to produce only another 230,000 units. During 2025, 70,000 units were produced. The company would report depreciation in 2024 of: $36,000. $43,900. $18,000. $21,950.arrow_forwardOn September 10, 2020, Vaughn Manufacturing incurred the following costs for one of its printing presses: Purchase of attachment $58500 Installation of attachment 5400 Replacement parts for renovation of press 15200 Labor and overhead in connection with renovation of press 6500 Neither the attachment nor the renovation increased the estimated useful life of the press. However, the renovation resulted in significantly increased productivity. What amount of the costs should be capitalized? $85600. $0 $79100. $70400.arrow_forward
- GKD Construction purchased a truck 6 years ago at a cost of $71600. Because the old truck required an overhaul of $4100 last year, and repairs of $2500 are needed in the current year, the company is now planning to purchase a new truck to replace the old one. The old truck has a trade-in value of $5400. The cost of the new truck is $82400. What amount of these costs represent sunk costs? $83600 O $71600 $81100 O $75700 SUParrow_forwardP10-7 Self-Construction Olson Machine Company manufactures small and large milling machines. Selling prices of these machines range from $35,000 to $200,000. During the 5-month period from August 1, 2019, through December 31, 2019, Olson manufactured a milling machine for its own use. This machine was built as part of the regular production activities. The project required a large amount of time from planning and supervisory person-nel, as well as that of some of the company’s officers, because it was a more sophisticated type of machine than the regular production models. Throughout the 5-month period, Olson charged all costs directly associated with the construction of the machine to a special account entitled “Asset Construction Account.” An analysis of the charges to this account as of December 31, 2019, follows:arrow_forward1. Reveille, Inc., purchased Machine #204 on April 2021, and placed the machine into production on April 3, 2021. The following information is relevant to Machine #204:Price P60,000Freight-in costs 2,500Preparation and installation costs 3,900Labor costs during regular production operation 10,200Credit terms 2/10, n/30Total productive output 138,500 unitsThe company expects that the machine could be used for 10 years, after which the salvage value would be zero. However, Reveille, Inc., intends to use the machine only eight years, after which it expects to be able to sell it for P9,800. The invoice for Machine #204 was paid April 10, 2021. The number of units produced in 2021 and 2022 were 23,200 and 29,000, respectively. Reveille computes depreciation to the nearest whole month.Required Compute the depreciation for the years indicated, using the following methods (round your answer to the nearest peso): 1. 2021: Units of productions2. 2022: Sum-of-the-years’- digits method 2. The…arrow_forward
- im Kwon Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $75,200, the accumulated depreciation is $30,100, its remaining useful life is five years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $156,400. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations: Present Operations Proposed Operations Sales $238,400 $238,400 Direct materials $81,200 $81,200 Direct labor 56,400 — Power and maintenance 5,300 27,800 Taxes, insurance, etc. 1,900 6,200 Selling and administrative expenses 56,400 56,400 Total expenses $201,200…arrow_forwardRequired information Skip to question [The following information applies to the questions displayed below.] Fancy Furniture produced a batch of 2,000 coffee tables at a cost of $355,000. It was discovered that the entire batch was finished improperly. Fancy can sell the tables as seconds for $305,000 or spend an additional $315,000 to refinish them and sell them for $605,000. In deciding whether to rework the tables or sell them as is, management should:arrow_forwardOn June 18, 2017, Dell Printing Co. incurred the following costs for one of its printing presses: Purchase of collating and stapling attachment $84,000 Installation of attachment 36,000 Replacement parts for overhaul of press 26,000 Labor and overhead in connection with overhaul 14,000 The overhaul resulted in a significant increase in production. Neither the attachment nor the overhaul increased the estimated useful life of the press. What amount of the above costs should be capitalized? $120,000 $84,000 $160,000 $0arrow_forward
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