a. Purchase price. b. Ordinary recurring repairs to keep the machinery in good working order. c. Lubrication before machinery is placed in service. d. Periodic lubrication after machinery is placed in service. e. Major overhaul to extend useful life by three years. f. Sales tax paid on the purchase price. g. Transportation and insurance while machinery is in transit from seller to buyer. h. Installation. i. Training of personnel for initial operation of the machinery. Classify each of the expenditures as a capital expenditure or a revenue expenditure related to machinery.

a. Purchase price. b. Ordinary recurring repairs to keep the machinery in good working order. c. Lubrication before machinery is placed in service. d. Periodic lubrication after machinery is placed in service. e. Major overhaul to extend useful life by three years. f. Sales tax paid on the purchase price. g. Transportation and insurance while machinery is in transit from seller to buyer. h. Installation. i. Training of personnel for initial operation of the machinery. Classify each of the expenditures as a capital expenditure or a revenue expenditure related to machinery.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Identify the following costs that could be capitalized on the firm’s balance sheet (included in property, plant, and equipment).a. New windshield wiper blades on the company’s truckb. New sidewalks inside the firm’s factoryc. Freight expenses for new equipment installed in the factoryd. Installation costs for the new equipmente. Realtor’s fees associated with factory purchasef. Minor engine repair on the truckg. Engine replacement on the truckh. Razing or demolishing a building on newly acquired landi. Design costs for a new buildingg. Value-added taxk. Construction expenses associated with building a garagel. Costs required to bring the equipment to its intended locationm. Administration and other general overhead costsn. Salaries of HR departmento. Wasted materials, labour and other resources p. idle capacity
Several expenditures are listed below. Indicate whether or not each expenditure would be included in the cost of acquisition for each item below. The answer box provides two options, Yes (if the expenditure would be included ) or No, (if the expenditure would not be included.) Cost testing materials and labor in testing a purchased machine Yes before use Compensation for injury to No construction worker Cost of overhaul to a used Yes machine purchased before initial use Cost of tearing down a building Yes on newly acquired land Repairs to a new machine Yes damaged while moving it into > > > > >
Which two of the costs on the invoice for a new company car would be classified as expenditure charged to profit or loss Road tax Number plates Maintenance contract Delivery cost
Refer to information in images. Question: Calculate the carrying amounts of the:• self-constructed plant;• provision for environmental site rehabilitation (if any);as they would be presented in the financial statements of GM Foods Limited at 31 December 20.15.
The cost of supplies (materials) used to test new equipment would be debited to which of the following accounts? a. Buildings Ob. Land c. Land Improvements Od. Machinery and Equipment
Part I According to Chapter 10, what is the difference between an ordinary repair, an asset improvement, and an extraordinary repair? Please give an example of each and describe how each would be accounted for. Part II (1) Please explain the Units-of-Output depreciation method and give an example of when it might be used. (2) Suppose that a machine had a units-of-production depreciation rate of $2 per operating hour and that the machine was used 20,000 hours the first year. Please calculate the depreciation for the first year and show what the journal entry would be. (3) Can we assume that the first year's depreciation expense (calculated in question 2 above) will also be the depreciation expense for subsequent years? Why or why not?
When considering the replacement of old equipment, which of the following ?item is relevant original cost of old equipment O accumulated depreciation on old equipment O future maintenance costs of old equipment book value of old equipment O loss on disposal of old equipment O
Oaktree Company purchased new equipment and made the following expenditures: Purchase price Sales tax Freight charges for shipment of equipment Insurance on the equipment for the first year Installation of equipment 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.) View transaction list Journal entry worksheet < 1 $50,000 2,700 750 958 1,500 2 Record the purchase of equipment.
Pre-Lecture Question 06 For indefinite-life intangibles other than goodwill, an impairment test should be conducted at least: 1 once during its useful life. 2 quarterly. 3 monthly. 4 annually.
The cost of installing new equipment would be debited to which of the following accounts? Oa. Land Improvements Ob. Buildings Oc. Repairs and Maintenance Expense Od. Machinery and Equipment
Survivor Company incurred the following cost for the year-ended December 31, 2021: Depreciation of delivery equipment Depreciation of administrative equipment Depreciation of production equipment Direct materials Direct labor Indirect labor Utilities, admin department Utilities, sales department Rent, finished goods warehouse Rent, raw materials warehouse Determine the total conversion cost. P11,953 P19,145 P15,646 P20,140 P25,644 P20,899 P30,974 P21,650 P15,830 P21,897
Which is an essential characteristic of Property, Plant, and Equipment? Property, Plant, and Equipment are tangible assets. Property, Plant, and Equipment are used in production or supply of goods or services. Property, Plant, and Equipment are expected to be used over a period of more than a year. All of the above.