Problem 53-4 (IFRS)Newcombe Company uses many kinds of machines in operations. Theentity acquires some machines from others and constructs somemachines itself.The following information pertains to a machine constructed by theentity:Cost of material to constructLabor costAllocated overhead costAllocated interest cost of financing machineCost of installationInsurance for one year700,000430,000220,000100,000120,00020,000150,00040,000Profit saved by self-constructionSafety inspection cost prior to useWhat total amount should be capitalized as cost of the machine?

A capitalized cost is a cost that is incurred from the purchase of a fixed asset that is expected to…

Newcombe Company uses many kinds of machines in operations. The entity acquires some machines from others and constructs some machines itself. The following information pertains to a machine constructed by the entity: Cost of material to construct Labor cost 700,000 430,000 220,000 100,000 120,000 20,000 150,000 40,000 Allocated overhead cost Allocated interest cost of financing machine Cost of installation Insurance for one year Profit saved by self-construction Safety inspection cost prior to use What total amount should be capitalized as cost of the machine?

Newcombe Company uses many kinds of machines in operations. The entity acquires some machines from others and constructs some machines itself. The following information pertains to a machine constructed by the entity: Cost of material to construct Labor cost 700,000 430,000 220,000 100,000 120,000 20,000 150,000 40,000 Allocated overhead cost Allocated interest cost of financing machine Cost of installation Insurance for one year Profit saved by self-construction Safety inspection cost prior to use 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

Connors Corporation acquired manufacturing equipment for use in its assembly line. Below are four independent situations relating to the acquisition of the equipment. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. The equipment was purchased on account for $36,000. Credit terms were 2/10, n/30. Payment was made within the discount period and the company records the purchases of equipment net of discounts. 2. Connors gave the seller a noninterest-bearing note. The note required payment of $38,000 one year from date of purchase. The fair value of the equipment is not determinable. An interest rate of 10% properly reflects the time value of money in this situation. 3. Connors traded in old equipment that had a book value of $11,500 (original cost of $25,000 and accumulated depreciation of $13,500) and paid cash of $33,000. The old equipment had a fair value of $6,900 on the date of the exchange. The exchange…
The following schedule reflects the incremental costs and revenues for acapital project. The company uses straight-line depreciation. The interestexpense reflects an allocation of interest on the amount of this investment,based on the company’s weighted average cost capital:Revenues $650,000Direct costs $270,000Variable overhead 50,000Fixed overhead 20,000Depreciation 70,000General & administrative 40,000Interest expense 8,000458,000Net profit before taxes $192,000══════The annual cash flow from this investment, before tax considerations, would be:
How much should be included as Intangibles?
A company's research department incurred $1,000,000 in material, labor, and overhead costs to construct a prototype of a new product and $100,000 to test and modify the prototype. Which of the following statements correctly describes the accounting treatment of prototype costs incurred by the company? 1. Capitalize $1,100,000 and amortize it over the expected sales life of the new product 2. Capitalize $1,100,000 and amortize it over the life of the prototype. 3. Capitalize $1,000,000 and amortize it over the life of the prototype and expense $100,000 as incurred. 4. Expense $1,100,000 as incurred.
The following was the expenditure on a contract for $600,000 Material $120,000Wages $164,000 Plant $ 20,000Overheads $8,600Cash received on account of the contract was $240,000 being 80% of the work certified. The Value of material in hand was $10,000. The plant has undergone 20% depreciation. Calculation the profit on this incomplete contract by preparing a contract account.
Assets Classified as Intagible Assets Required: What is the total amount to be recognized as intangible assets?
Required information [The following information applies to the questions displayed below.) At the beginning of the year, Cruz & Turner Corporation 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 $10,700 970 1,110 850 Required: 1. Compute the amount to be capitalized for Machine A Total cost U