Acquisition Cost of Long-Lived Asset The following data relate to a firm's purchase of a machine used in the manufacture of its product: Invoice price Applicable sales tax Cash discount taken for prompt payment Freight paid Cost of insurance coverage on machine while in transit Installation costs 3,000 Testing and adjusting costs 475 Repair of damages to machine caused by the firm's employees 750 Prepaid maintenance contract for first year of machine's use 300 Determine the acquisition cost of the machine. Acquisition Cost = $ $30,000 2,000 400 260 125

Acquisition Cost of Long-Lived Asset The following data relate to a firm's purchase of a machine used in the manufacture of its product: Invoice price Applicable sales tax Cash discount taken for prompt payment Freight paid Cost of insurance coverage on machine while in transit Installation costs 3,000 Testing and adjusting costs 475 Repair of damages to machine caused by the firm's employees 750 Prepaid maintenance contract for first year of machine's use 300 Determine the acquisition cost of the machine. Acquisition Cost = $ $30,000 2,000 400 260 125

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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Acquisition Cost of Long-Lived Asset The following data relate to a firm’s purchase of a machine used in the manufacture of its product: Invoice price $34,000 Applicable sales tax 2,000 Cash discount taken for prompt payment 400 Freight paid 260 Cost of insurance coverage on machine while in transit 125 Installation costs 2,000 Testing and adjusting costs 475 Repair of damages to machine caused by the firm’s employees 750 Prepaid maintenance contract for first year of machine’s use 400 Determine the acquisition cost of the machine.
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Acquisition and retirements Capital lease Goodwill Net income Ownership Property tax Repairs and maintenance Retirement work order Revenue Subsidiary ledger Working papers
Question text Depreciation Choices and Outcome.Mulligan Co. purchased a new machine on January 1. The following information pertains to the purchase: Life of asset 5 years Salvage value $3,000 Purchase price 18,000 Sales tax 1,000 Freight cost 800 Electrical set-up 700 Custom programming 500 Estimated annual labor savings 3,500 Additional revenue generated 8,000 a. Determine the capitalized cost of the new machine$Answerb. Compute annual depreciation, accumulated depreciation and the machine's book value for the first three year assuming:i. Straight-line depreciationii. Double-declining-balance method Straight-Line Depreciation Double-Declining Balance DepreciationExpense AccumulatedDepreciation Book Value atYear-end DepreciationExpense AccumulatedDepreciation Book Value atYear-End Year 1 Year 2 Year 3 c. Assume the machine is sold for $8,000 at the end of the third year after depreciation…
Sale of Plant Asset Raine Company has a machine that originally cost $58,000. Depreciation has been recorded for four years using the straight-line method, with a $5,000 estimated salvage value at the end of an expected ten-year life. After recording depreciation at the end of four years, Raine sells the machine. Determine the gain or loss in each scenario if the machine sold for: Scenario Gain, Loss, or Neither Amount a. $37,000 cash 0 b. $36,800 cash 0 c. $28,000 cash 0
From page 7-2 of the VLN, intangible assets are long term assets and would NOT include: Group of answer choices A. Goodwill B. Natural gas C. Patents D. Copyrights
DEPRECIATION OF FIXED ASSETS: ASSET INFO: use the following information for all of the depreciation related questions that follow. Keeping Kids Active Company, Inc makes playground balls for children. KKAC, Inc purchased and began using (placed in service) a piece of equipment to help the company make the balls on September 1, 2020. The equipment cost $56,000 to purchase, $4,000 for delivery and installation (combined). At the time of purchase, KKAC estimates this equipment will be used for 4 years and have a salvage value of $6,00O. KKAC expects to make 250,000 playground balls in total with this equipment. *** Determine the Asset Cost (acquisition cost) of this asset. Show your calculations on your PDF upload.
Cost of a Fixed Asset Borges Inc. recently purchased land to use for the construction of its new manufacturing facility and incurred the following costs: purchase price, $83,000; interest charges, $500; real estate commissions, $4,800; delinquent property taxes, $1,500; closing costs, $3,300; and clearing and grading of the land, $8,100. Required: Determine the cost of the land. X Feedback Check My Work The cost of a fixed asset is any expenditure necessary to acquire the asset and to prepare the asset for use. These expenditures are said to be capitalized. screen rec
DEPRECIATION OF FIXED ASSETS: ASSET INFO: use the following information for all of the depreciation related questions that follow. Keeping Kids Active Company, Inc makes playground balls for children. KKAC, Inc purchased and began using (placed in service) a piece of equipment to help the company make the balls on September 1, 2020. The equipment cost $56,000 to purchase, $4,000 for delivery and installation (combined). At the time of purchase, KKAC estimates this equipment will be used for 4 years and have a salvage value of $6,00O. KKAC expects to make 250,000 playground balls in total with this equipment. *** Determine the Asset Cost (acquisition cost) of this asset. Show your calculations on your PDF upload.
Recording Asset Exchanges Minneapolis Inc. has equipment with an original cost of $52,500 and accumulated depreciation of $30,000. This equipment was traded in for new equipment with a list price of $60,000. The new machine can be purchased without a trade-in for $56,250 cash. The difference between the fair value of the new asset and the market value of the old asset will be paid in cash. Prepare the entry to record acquisition of the new machine under each of the following separate cases. a. The new machine is purchased for cash with no trade-in. b. The transaction has commercial substance. The old equipment is traded in, and $37,500 cash is paid. c. The same as in part b except that the transaction lacks commercial substance. a. Account Name Dr. Cr. Answer Answer b. Account Name Dr. Cr. Answer Answer Answer Answer Answer Answer Answer Answer C. Account Name Dr. Cr. Answer…
Natural Resources The Hollister Company acquires a silver mine at the cost of $2,100,000 on January 1. Along with the purchase price Hollister pays additional costs associated with development of $50,000, Hollister expects the mine will have a salvage value of $300,000 once all the silver has been mined. Best estimates are that the mine contains 250,000 tons of ore. Required a: Prepare the entry to record the purchase of the silver mine. b. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined and all the ore is sold, c. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined but only 15,000 tons of the are are sold Description Credit 4 # Purchase of silver mine # = To record depletion on silver mine Siver inventory To record depletion on silver mine Debit
Please answer, The questions are under IAS 38 Intangible Assets