Lax Company recently acquired two items of equipment. The transactions are described as follows: * * Acquired a press at an invoice price of P3,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment were P50,000 and installation cost amounted to P200,000. Acquired a welding machine at an invoice price of P2,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000. The increase in the equipment account as a result of the above transactions should be a. 4,900,000 b. 5,000,000 c. 5,100,000 d. 5,200,000.

Lax Company recently acquired two items of equipment. The transactions are described as follows: * * Acquired a press at an invoice price of P3,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment were P50,000 and installation cost amounted to P200,000. Acquired a welding machine at an invoice price of P2,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000. The increase in the equipment account as a result of the above transactions should be a. 4,900,000 b. 5,000,000 c. 5,100,000 d. 5,200,000.

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

.
Depletion Expense Prepare the entry to record the cost of the ore mine and year-end adjusting entry. General Journal View transaction list Journal entry worksheet < A B Record the cost of the ore mine in cash. Transaction 1 Note: Enter debits before credits. General Journal Debit Credit
The UST-ECE Department purchased a Communications Trainer worth P 250,000. Freight and insurance charges amounted to P 18,000; customs’, cargo and broker’s fee, P 8,500; taxes, permits, and other expenses, P 25,000. If the estimated life of the trainer is 10 years with a salvage value at the end of life of P 20,000 Using DBM: The depreciation charge during the 4th year is: P 31,745.65 B. P 35,827.27 C. P 71,408.09 D. P 31,818.18 The book value at the end of 6 years is: P 71,181.82 B. P 59,201.5371,181.82 C. P 49,095.01 D. P 61,818.18
Double Island Ltd constructed a Whizbang Machine and incurred the following costs in doing so: Amounts paid to employees to build the machine $120 000 Raw materials consumed in building the machine $45 000 Depreciation of manufacturing equipment attributed to the construction of the Whizbang Machine $25 000 REQUIRED Provide the journal entries that Double Island Ltd would use to account for the construction of the asset. Assume that immediately after the journal entries in part (a) have been made, new information becomes available that indicates that the recoverable amount of the Whizbang Machine is only $160 000. Provide the adjusting journal entries
On January 2, Bering Company disposes of a machine costing $47,800 with accumulated depreciation of $25,749. Prepare the entries to record the disposal under each separate situation. The machine is sold for $18,494 cash. The machine is traded in for a new machine having a $64,300 cash price. A $22,762 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. The machine is traded in for a new machine having a $64,300 cash price. A $17,072 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance.
Select financial information for Logistical Corp. as at December 31, 20X6, follows: Please find the attached image Additional information is as follows: • During the year, Logistical sold equipment for proceeds of $50,000. The equipment had a cost of $80,000 and accumulated depreciation of $35,000.• During the year, a review of Logistical’s goodwill was completed, and it was determined that the asset was impaired and should be written down by $3,000.• Logistical did not purchase any additional investments in the year. Any changes in the fair value of investments have been adjusted through other comprehensive income. These securities are not cash equivalents.• During the year, a new lease was signed for equipment that had a fair market value of $45,000. Depreciation expense for the year totalled $1,000. The new lease was signed in the year, which required a $7,000 payment at the start of the lease.• Logistical elects to classify any interest paid and dividends paid as financing…
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.
Oki Company pays $283,500 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment. 1. Paid $20,250 cash for a new component that increased the equipment's productivity. 2. Paid $5,063 cash for minor repairs necessary to keep the equipment working well. 3. Paid $13,200 cash for significant repairs to increase the useful life of the equipment from four to seven years. View transaction list Journal entry worksheet > Record the betterment cost of $20,250 paid in cash. Note: Enter debits before credits. Debit Credit Transaction General Journal 1 MacBook Air
Delso Company purchased the following on January 1, 20x1: • Office equipment at a cost of $54,000 with an estimated useful life to the company of three years and a residual value of $16,200. The company uses the double-declining-balance method of depreciation for the equipment. • Factory equipment at an invoice price of $741,000 plus shipping costs of $36,000. The equipment has an estimated useful life of 105,000 hours and no residual value. The company uses the units-of-production method of depreciation for the equipment. • A patent at a cost of $252,000 with an estimated useful life of 12 years. The company uses the straight-line method of amortization for intangible assets with no residual value. The company's year ends on December 31. Required: 1-a. Prepare a partial depreciation schedule of office equipment for 20x1, 20x2, and 20x3. 1-b. Prepare a partial depreciation schedule of factory equipment. The company used the equipment for 8,600 hours in 20x1, 9,800 hours in 20x2, and…
Last Chance Mine (LCM) purchased a coal deposit for $1,654,350. It estimated it would extract 13,450 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.35 million, $6.25 million, and $5.2 million for years 1 through 3, respectively. During years 1–3, LCM reported net income (loss) from the coal deposit activity in the amount of ($16,400), $705,000, and $577,500, respectively. In years 1–3, LCM extracted 14,450 tons of coal as follows: (1) Tons of Coal (2) Basis Depletion (2)/(1) Rate Tons Extracted per Year Year 1 Year 2 Year 3 13,450 $1,654,350 $123.00 2,550 7,450 4,450 b. What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent)?
Required information Skip to question [The following information applies to the questions displayed below.] Onslow Company purchased a used machine for $144,000 cash on January 2. On January 3, Onslow paid $ 8,000 to wire electricity to the machine. Onslow paid an additional $1,600 on January 4 to secure the machine for operation. The machine will be used for six years and have a $17, 280 salvage value. Straight line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. 3. Prepare journal entries to record the machine's disposal under each separate situation: (a) it is sold for $24, 500 cash and (b) it is sold for $98, 000 cash.
Loban Company purchased, on January 1 for cash, four cars for $9,000 each and expects that they will be sold in 3 years for $1,500 each. The company uses group depreciation on a straight-line basis. Required: 1. Prepare journal entries to record the acquisition and the first year’s depreciation expense. 2. If one of the cars is sold at the beginning of the second year for $7,000, what journal entry is required?