Oriole Corp., a public company located in Manitoba, both purchases and constructs various pieces of machinery and equipment that it uses in its operations. The following items are for machinery that was purchased and a piece of equipment that was constructed during the 2020 fiscal year: Machinery Cash paid for machinery, including sales tax of $10,150 and recoverable GST of $7,250 $162,400 Freight and insurance cost while in transit 2,820 Cost of moving machinery into place at factory 3,200 Wage cost for technicians to test machinery 3,900 Materials cost for testing 500 Insurance premium paid on the machinery for its first year of operation 1,900 Special plumbing fixtures required for new machinery 8,050 Repair cost on machinery incurred in first year of operations 1,000 Cash received from provincial government as incentive to purchase machinery 26,300 Equipment (Self-Constructed) Material and purchased parts (gross cost $190,000; failed to take 1% cash discount; the company uses the net method of recording purchases of material and parts) $190,000 Imputed interest on funds used during construction (Note: The company has no borrowing costs but it has 14,000 calculated imputed interest on its equity/share financing) Labour costs for manufacturing the equipment 195,000 Overhead costs (fixed $22,900; variable $30,700) Profit on self-construction Cost of installing equipment 53,600 29,300 4,400 Calculate the cost of the machinery and the cost of the equipment. (a) Cost of the machinery $ +A (b) Cost of the equipment $

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Oriole Corp., a public company located in Manitoba, both purchases and constructs various pieces of machinery and equipment that
it uses in its operations. The following items are for machinery that was purchased and a piece of equipment that was constructed
during the 2020 fiscal year:
Machinery
Cash paid for machinery, including sales tax of $10,150 and recoverable GST of $7,250
$162,400
Freight and insurance cost while in transit
2,820
Cost of moving machinery into place at factory
3,200
Wage cost for technicians to test machinery
3,900
Materials cost for testing
500
Insurance premium paid on the machinery for its first year of operation
1,900
Special plumbing fixtures required for new machinery
8,050
Repair cost on machinery incurred in first year of operations
1,000
Cash received from provincial government as incentive to purchase machinery
26,300
Equipment (Self-Constructed)
Material and purchased parts (gross cost $190,000; failed to take 1% cash discount; the company uses the net
method of recording purchases of material and parts)
$190,000
Imputed interest on funds used during construction (Note: The company has no borrowing costs but it has
14,000
calculated imputed interest on its equity/ share financing)
Labour costs for manufacturing the equipment
195,000
Overhead costs (fixed $22,900; variable $30,700)
Profit on self-construction
Cost of installing equipment
53,600
29,300
4,400
Calculate the cost of the machinery and the cost of the equipment.
(a)
Cost of the machinery
$
(b)
Cost of the equipment
$
Transcribed Image Text:Oriole Corp., a public company located in Manitoba, both purchases and constructs various pieces of machinery and equipment that it uses in its operations. The following items are for machinery that was purchased and a piece of equipment that was constructed during the 2020 fiscal year: Machinery Cash paid for machinery, including sales tax of $10,150 and recoverable GST of $7,250 $162,400 Freight and insurance cost while in transit 2,820 Cost of moving machinery into place at factory 3,200 Wage cost for technicians to test machinery 3,900 Materials cost for testing 500 Insurance premium paid on the machinery for its first year of operation 1,900 Special plumbing fixtures required for new machinery 8,050 Repair cost on machinery incurred in first year of operations 1,000 Cash received from provincial government as incentive to purchase machinery 26,300 Equipment (Self-Constructed) Material and purchased parts (gross cost $190,000; failed to take 1% cash discount; the company uses the net method of recording purchases of material and parts) $190,000 Imputed interest on funds used during construction (Note: The company has no borrowing costs but it has 14,000 calculated imputed interest on its equity/ share financing) Labour costs for manufacturing the equipment 195,000 Overhead costs (fixed $22,900; variable $30,700) Profit on self-construction Cost of installing equipment 53,600 29,300 4,400 Calculate the cost of the machinery and the cost of the equipment. (a) Cost of the machinery $ (b) Cost of the equipment $
Expert Solution
steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education