In January, 2022, Harmony Inc. has the following expenditures related to manufacturing a new generation of its product. Match each expenditure to the appropriate accounting treatment on the right. Takes possession of a manufacturing machine. The vendor sends an invoice for $650,000. A. No accounting entry is necessary. B. Capitalize to a different asset account. C. Capitalize to the Machine account. D. Expense. Pays a machine import duty of $35,000 to the government. Pays employees $75,000 for research and development to finalize the new product design. v Receives an invoice for $4,250 from the company that shipped the machine. Pays employees $16,500 to install, customize, and test the new manufacturing machine. Pays $1,200 for a one-year insurance policy for the machine, with coverage beginning when the machine is placed into service on February 16.
In January, 2022, Harmony Inc. has the following expenditures related to manufacturing a new generation of its product. Match each expenditure to the appropriate accounting treatment on the right. Takes possession of a manufacturing machine. The vendor sends an invoice for $650,000. A. No accounting entry is necessary. B. Capitalize to a different asset account. C. Capitalize to the Machine account. D. Expense. Pays a machine import duty of $35,000 to the government. Pays employees $75,000 for research and development to finalize the new product design. v Receives an invoice for $4,250 from the company that shipped the machine. Pays employees $16,500 to install, customize, and test the new manufacturing machine. Pays $1,200 for a one-year insurance policy for the machine, with coverage beginning when the machine is placed into service on February 16.
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 55P
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![In January, 2022, Harmony Inc. has the following expenditures related
to manufacturing a new generation of its product. Match each
expenditure to the appropriate accounting treatment on the right.
Takes possession of a
manufacturing machine. The
vendor sends an invoice for
A. No accounting entry is necessary.
B. Capitalize to a different asset account.
C. Capitalize to the Machine account.
$650,000.
D. Expense.
Pays a machine import duty of
$35,000 to the government.
Pays employees $75,000 for
research and development to
finalize the new product design.
Receives an invoice for $4,250
from the company that shipped the
machine.
Pays employees $16,500 to install,
customize, and test the new
manufacturing machine.
v Pays $1,200 for a one-year
insurance policy for the machine,
with coverage beginning when the
machine is placed into service on
February 16.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3d3d2fa4-1124-4922-98fc-04dd06c75595%2Fa2fc60a6-3e5e-4f48-91f0-40ba0d5babdf%2F2chheh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:In January, 2022, Harmony Inc. has the following expenditures related
to manufacturing a new generation of its product. Match each
expenditure to the appropriate accounting treatment on the right.
Takes possession of a
manufacturing machine. The
vendor sends an invoice for
A. No accounting entry is necessary.
B. Capitalize to a different asset account.
C. Capitalize to the Machine account.
$650,000.
D. Expense.
Pays a machine import duty of
$35,000 to the government.
Pays employees $75,000 for
research and development to
finalize the new product design.
Receives an invoice for $4,250
from the company that shipped the
machine.
Pays employees $16,500 to install,
customize, and test the new
manufacturing machine.
v Pays $1,200 for a one-year
insurance policy for the machine,
with coverage beginning when the
machine is placed into service on
February 16.
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