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Blue Co. both purchases and constructs various equipment it uses in its operations. The following items for two different types of equipment were recorded in random order during the calendar year 2020. Purchase Cash paid for equipment, including sales tax of $6,400 Freight and insurance cost while in transit $134,400 2,560 Cost of moving equipment into place at factory 3,968 Wage cost for technicians to test equipment 5,120 Insurance premium paid during first year of operation on this equipment 1,920 Special plumbing fixtures required for new equipment 10,240 Repair cost incurred in first year of operations related to this equipment 1,664 Construction Material and purchased parts (gross cost $256,000; failed to take 2% cash discount) Imputed interest on funds used during construction (stock financing) $256,000 17,920 Labor costs 243,200 Allocated overhead costs (fixed-$25,600; variable-$38,400) Profit on self-construction Cost of installing equipment 64,000 38,400 5,632 Compute the total cost to be capitalized for each of these two pieces of equipment. Purchase equipment $ Construction equipment $

Blue Co. both purchases and constructs various equipment it uses in its operations. The following items for two different types of equipment were recorded in random order during the calendar year 2020. Purchase Cash paid for equipment, including sales tax of $6,400 Freight and insurance cost while in transit $134,400 2,560 Cost of moving equipment into place at factory 3,968 Wage cost for technicians to test equipment 5,120 Insurance premium paid during first year of operation on this equipment 1,920 Special plumbing fixtures required for new equipment 10,240 Repair cost incurred in first year of operations related to this equipment 1,664 Construction Material and purchased parts (gross cost $256,000; failed to take 2% cash discount) Imputed interest on funds used during construction (stock financing) $256,000 17,920 Labor costs 243,200 Allocated overhead costs (fixed-$25,600; variable-$38,400) Profit on self-construction Cost of installing equipment 64,000 38,400 5,632 Compute the total cost to be capitalized for each of these two pieces of equipment. Purchase equipment $ Construction equipment $

FINANCIAL ACCOUNTING
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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Blue Co. both purchases and constructs various equipment it uses in its operations. The following items for two different types of equipment were recorded in random order during the calendar year 2020. Purchase Cash paid for equipment, including sales tax of $6,400 Freight and insurance cost while in transit $134,400 2,560 Cost of moving equipment into place at factory 3,968 Wage cost for technicians to test equipment 5,120 Insurance premium paid during first year of operation on this equipment 1,920 Special plumbing fixtures required for new equipment 10,240 Repair cost incurred in first year of operations related to this equipment 1,664 Construction Material and purchased parts (gross cost $256,000; failed to take 2% cash discount) Imputed interest on funds used during construction (stock financing) $256,000 17,920 Labor costs 243,200 Allocated overhead costs (fixed-$25,600; variable-$38,400) Profit on self-construction Cost of installing equipment 64,000 38,400 5,632 Compute the total cost to be capitalized for each of these two pieces of equipment. Purchase equipment $ Construction equipment $
Transcribed Image Text:Blue Co. both purchases and constructs various equipment it uses in its operations. The following items for two different types of equipment were recorded in random order during the calendar year 2020. Purchase Cash paid for equipment, including sales tax of $6,400 Freight and insurance cost while in transit $134,400 2,560 Cost of moving equipment into place at factory 3,968 Wage cost for technicians to test equipment 5,120 Insurance premium paid during first year of operation on this equipment 1,920 Special plumbing fixtures required for new equipment 10,240 Repair cost incurred in first year of operations related to this equipment 1,664 Construction Material and purchased parts (gross cost $256,000; failed to take 2% cash discount) Imputed interest on funds used during construction (stock financing) $256,000 17,920 Labor costs 243,200 Allocated overhead costs (fixed-$25,600; variable-$38,400) Profit on self-construction Cost of installing equipment 64,000 38,400 5,632 Compute the total cost to be capitalized for each of these two pieces of equipment. Purchase equipment $ Construction equipment $
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