Manny Company uses many kinds of machines in its operations. The following information relates to a machine that was acquired at the beginning of the current year: Cash paid for machine, including VAT of P96,000 Cost of transporting machine Labor cost of installation by expert fitter Labor cost of testing machine Insurance cost for the current year Cost of training for personnel who will use the machine Cost of safety rails and platform surrounding machine Cost of water device to keep machine cool Cost of adjustment to machine to make it operate more efficiently Estimated dismantling cost to be incurred as required by contract 896,000 30,000 50,000 40,000 15,000 25,000 60,000 80,000 75,000 65,000 What total amount should be capitalized as cost of the machine?

Manny Company uses many kinds of machines in its operations. The following information relates to a machine that was acquired at the beginning of the current year: Cash paid for machine, including VAT of P96,000 Cost of transporting machine Labor cost of installation by expert fitter Labor cost of testing machine Insurance cost for the current year Cost of training for personnel who will use the machine Cost of safety rails and platform surrounding machine Cost of water device to keep machine cool Cost of adjustment to machine to make it operate more efficiently Estimated dismantling cost to be incurred as required by contract 896,000 30,000 50,000 40,000 15,000 25,000 60,000 80,000 75,000 65,000 What total amount should be capitalized as cost of the machine?

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

Subject - account Please help me. Thankyou.
At the beginning of the year, Algernon Companies bought three used machines. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Details for Machine A are provided below. Cost of the asset $9,200 Installation costs 820 Renovation costs prior to use 660 Repairs after production began 550 Required: 1. Compute the amount to be capitalized for Machine A.
Prepare depreciation schedules for straight-line, double-declining-balance, and units-of-production methods. Use the imformation below and the images attached: +when doing units-of-production methods use the image attached with the listed machine hours The Fraser River Corporation has purchased a new piece of factory equipment on January 1, 2024. The equipment costs $620,000 and has an estimated useful life of four years, or 12,000 machine hours. At the end of four years, the equipment is estimated to have a residual value of $60,000. also when competing each of the depreciation schedules for each of the methods, what is the minimum amount that Fraser River will sell the factory equipment for in order to have a gain of $16,000?
At the end of the reporting period, Pinky Corp. shows the following account for machinery it had assembled for its own use during the period: Cash paid for equipment, including VAT of P9,600 Insurance costs for current year 89,600 1,500 Cost of dismantling old machine 14,480 Cash proceeds from sale of old machine 12,000 Raw materials used in construction of new machine 76,000 Labor on construction of new machine 49,000 Cost of installation 11,200 Costs of water devices to keep machine cool 8,000 Materials spoiled in machine trial runs 2,400 Profit on construction 24,000 Purchase of machine tools 13,000 Costs of adjustments to machine to make it operate more efficiently 7,500 An analysis of the details in the account disclosed the following: a. Cash discounts received on the payments for materials used in construction totaled P3,000, and these were reported in the purchase discounts account. b. The factory overhead account shows a balance of P292,000 for the current period; this balance…
BolaBola uses different kinds of machines in its manufacturing process. The following information relates to the acquisition of machines that it has recorded in 2020.· Cash paid for equipment- P250,000· Cost of transporting machine - insurance and transport- P9,000· Labor cost of installation by expert fitter- P15,000· Labor cost of testing equipment- P12,000· Insurance cost for 2020- P4,500· Cost of training for personnel who will use the machine- P7,500· Cost of safety rails and platforms surrounding machine- P18,000· Cost of water devices to keep machine cool- P24,000· Cost of adjustments to machine during 2020 to make it operate more efficiently- P22,500 What is the cost of the machine?
A company owner has asked his accountant to research the photocopier equipment available from vendors, and to recommend the two best equipment alternatives. The company owner will decide on one piece of equipment to purchase. The fee charged for the accountant’s research was $500. The accountant’s report produced the following information: Photocopier (A) Photocopier (B) Initial cost, including installation $6,500 $ 6,000 Economic life 5 years 5 years Scrap value at end of economic life -0- -0- Initial training cost $ 500 $ 700 Annual maintenance $ 400 $ 300 Annual wage cost $12,500 $12,500 REQUIRED Which photocopier should the company owner choose? Why? The company owner requested your help in preparing the coming year company budget. Please, guide him to the best method and appropriate type from your perspective. Evaluation and Grading: Your answers would be evaluated and graded based on: Coverage…
Okl Company pays $283,000 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 $14,150 cash for a new component that increased the equipment's productivity. 2. Paid $3,538 cash for minor repairs necessary to keep the equipment working well. 3. Paid $7,100 cash for significant repairs to increase the useful life of the equipment from four View transaction list Journal entry worksheet seven years. Journal entry worksheet Journal entry worksheet
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
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.
Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $47,500. The machine's useful life is estimated at 10 years, or 405,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 34,500 units of product. Exercise 8-6 Double-declining-balance depreciation LO P1 Determine the machine's second-year depreciation using the double-declining-balance method. Double-declining-balance Depreciation es Annual Depreciation Expense Depreciation expense Choose Factors: Choose Factor(%) !! First year's depreciation Second year's depreciation %3D
At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Machine A Machine B Machine C Cost of the asset $ 9,600 $ 38,800 $ 22,600 Installation costs 850 2,700 1,800 Renovation costs prior to use 650 2,300 2,800 Repairs after production began 700 700 1,300 By the end of the first year, each machine had been operating 8,000 hours. Required: Compute the cost of each machine. Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following: Estimates Machine Life Residual Value Depreciation Method A 5 years $ 1,600 Straight-line B 20,000 hours 1,200 Units-of-production C 10 years 2,000 Double-declining-balance
! Required information [The following information applies to the questions displayed below.] At the beginning of the year, Almond Factory bought three used machines. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Details for Machine A are provided below. Cost of the asset Installation costs Renovation costs prior to use Repairs after production began $10,400 940 1,020 790 Prepare the journal entry to record year 2 straight-line depreciation expense for Machine A, assuming an estimated life of 4 years and $1,000 residual value. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)