А.Place an "X" in the blank for the following items which you believe should be includedin the cost of a piece of equipment?1.Purchase price2.Sales tax3.Electricity to run the equipment4.Installation cost5.Insurance while being transported6.Insurance while in use7.Freight chargesВ.Your company signed a contract to construct a new building so you borrowed $600,000 onFebruary 1, 2021 and issued a three-year, 6% note which pays interest annually. You spent$200,000 for construction on April 1, 2021 and an additional $300,000 on November 1.How much interest should be capitalized in 2021? Please show your calculations.С.Your company spent $30,000 for repairs and modifications to significantly increase thelife of your equipment. What entry should be made for the $30,000?D.You bought equipment on January 1, 2018, for $62,000. The equipment has an estimatedlife of 8 years and an estimated salvage value of $6,000. Your company uses the straight-line method of depreciation. On October 1, 2021, your company sold the equipment for$35,000. How much gain or loss should be recorded on this sale? Please show yourcalculations.

As per IFRS 16 property plant and equipment Cost of piece of equipment consists of Its purchase…

А. Place an "X" in the blank for the following items which you believe should be included in the cost of a piece of equipment? 1. Purchase price 2. Sales tax 3. Electricity to run the equipment 4. Installation cost 5. Insurance while being transported 6. Insurance while in use 7. Freight charges

А. Place an "X" in the blank for the following items which you believe should be included in the cost of a piece of equipment? 1. Purchase price 2. Sales tax 3. Electricity to run the equipment 4. Installation cost 5. Insurance while being transported 6. Insurance while in use 7. Freight charges

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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Which of the following items should not be included in the cost of inventory? Select one: O a. The initial purchase price of inventory O b. Freight out cost to deliver inventory to a customer c. Insurance cost paid to purchase the inventory d. Delivery cost paid to purchase the inventory
Carriage and insurance paid to (CIP) is one of the terms of sale is used in place of which of the following? A. Free alongside ship (FAS) B. Cost, insurance, and freight (CIF) C. Cost and freight (CFR)D. Free on board (FOB)
Shipping cost for goods sold to customers, in transit, shipped f.o.b. point of shipment be classified as a current liability? True O False
Match the correct pairs FOB destination and you are the buyer A. The buyer pays this amount FOB destination and you are the seller B. You pay and add to inventory costs FOB shipping point and you are the buyer C. The seller pays this FOB shipping point and you are the seller D. You pay and expense as delivery charge
The amount recorded for net cost of purchases includes all of the following EXCEPT: Purchase discounts. Freight costs paid by the seller. Returns and allowances. Freight costs paid by the buyer.
An encumbrance represents the estimated future liabilities for goods or services resulting from placing a purchase order or signing a contract. a. True b. False
Goods available for sale can: Multiple Choice 4- be sold and then become Cost of Goods Sold on the income statement. not be sold and thus are not reported as Cost of Goods Sold on the balance sheet. not be sold and thus are reported as Inventory on the income statement. be sold and thus reported as Cost of Goods Sold on the balance sheet.
Freight on Board (FOB) shipping point requires that the seller pays the shipping cost.. True or False
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