14. A company purchased a 10 - ton draw press at a cost of $187,000 with terms of 2/15, n 45. Payment was made within the discount period. Shipping costs were $3,800, which included $320 for insurance in transit. Installation costs totaled $12,900, which included $ 4,600 for taking out a section of a wall and rebuilding it because the press was too large for the doorway. The capitalized cost of the 10 - ton draw press is:

14. A company purchased a 10 - ton draw press at a cost of $187,000 with terms of 2/15, n 45. Payment was made within the discount period. Shipping costs were $3,800, which included $320 for insurance in transit. Installation costs totaled $12,900, which included $ 4,600 for taking out a section of a wall and rebuilding it because the press was too large for the doorway. The capitalized cost of the 10 - ton draw press is:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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7. On January 1, 2020 Gingerbread, Corp. purchased a reindeer merry-go-round as an attraction to draw customers during the holiday season. The following information is available: Invoice price $280,000 Shipping cost $4,000 Set-up cost $2,000 Insurance to cover years 2020 and 2021 $12,000 Necessary repair during set-up 500 Determine the amount to be record as the capitalized cost of the asset. a.286,000 b.280,000 c.286,500 d.298,500
Questions # 24-27 are based on the information below: Chubbyville purchases a delivery van for $23,500. Chubbyville estimates a four-year service life and a residual value of $2,500. During the four-year period, the company expects to drive the van 105,000 miles. Actual miles driven were 24,000 miles in Year 1 and 26,000 miles in Year 2. 24. Using the straight-line method, what is the depreciation expense for year 2? A. $5,250 B. $5,875 C. $10,500 D. $11,750 25. Using the straight-line method, what is the book value at the end of year 3? A. $9,750 B. $10,550 C. $7,750 D. $8,250 26. Using double-declining balance method, what is the depreciation expense for year 1? A. $5,250 B. $5,875 C. $11,250 D. $11,750 27. Using the activity-based method, what is the balance in accumulated depreciation at the end of year 2? A. $10,000 B. $4,800 C. $5,200 D. $13,500
13. South Bend Hardware Company has a giant paint mixer that cost $31,500. The estimated salvage value of the paint mixer at the end of its useful life of 15 years is estimated to be $1,500. South Bend estimates that the machine can mix 200,000 cans of paint during its lifetime. During the first year of operations, the machine mixed 10,000 cans of paint; during the second it mixed 25,000 cans; during the third it mixed 20,000 cans of paint. 1. Compute depreciation expense for the THIRD year of the paint mixer's life under each of the following methods. Straight-line Units-of production Double-declining balance I 2. Show how the paint mixer would be reported on the balance sheet at the end of the third year assuming that they used the straight-line method.
The Flintstone Construction Company delivers dirt and stone from local quarries to its construction sites. A new truck that was purchased for a cost of $122,000 at the beginning of the year was expected to deliver 122,000 tons over its useful life. The following is a breakdown of the tons delivered during the year to each construction site: Construction Sites: Tons Delivered: Multiple Choice $12,767 $1,400 A 1,400 How much truck depreciation should be allocated to Site A? (Do not round intermediate calculations. Round your answer to the nearest dollar.) $1,220 B 2,900 None of the answers are correct. с 3,400 D 900
Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $115,370. The seller agreed to allow a 6.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transportation cost amounted to $2,080. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,150. The loader operator is paid an annual salary of $11,910. The cost of the company's theft insurance policy increased by $2,090 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $9,900. Required: Determine the amount to be capitalized in an asset account for the purchase of the front-end loader. Note: Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign. Costs that are to be capitalized: List price Total costs
Dorman company purchased a new machine for its production process. The following costs were incurred for the new machine. Training costs for workers who will operate the machine $15,000 Wages paid to workers who operate the machine during production 109,000 Ordinary repairs to the machine before the first production run 1,000 1 Cost of platform used to properly secure the machine 30,000 Costs of tests run which took place before the first production run 8,000 WHICH COSTS SHOULD BE ADDED TO THE COST OF MACHINE?
10. Onslow Company purchased a used machine for $240,000 cash on January 2. On January 3, Onslow paid $10,000 to wire electricity to the machine. Onslow paid an additional $2,000 on January 4 to secure the machine for operation. The machine will be used for six years and have a $28,800 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. 2. Prepare journal entries to record depreciation of the machine at December 31.