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Question 1 of 18 On November 1, Beer Inc purchased a new machine for $200,000. The company paid $5,900 to have the machine delivered to its shop and $2,800 to install the machine. In addition, Beer Inc paid $1,800 of interest to borrow money from the bank to purchase the machinery, and $5,000 to insure the machine for the first year of use. Beer Inc also paid $8,000 for improvements to the machine that are expected to enhance its efficiency. What total amount will the company capitalize on its balance sheet for this machine asset?

Question 1 of 18 On November 1, Beer Inc purchased a new machine for $200,000. The company paid $5,900 to have the machine delivered to its shop and $2,800 to install the machine. In addition, Beer Inc paid $1,800 of interest to borrow money from the bank to purchase the machinery, and $5,000 to insure the machine for the first year of use. Beer Inc also paid $8,000 for improvements to the machine that are expected to enhance its efficiency. What total amount will the company capitalize on its balance sheet for this machine asset?

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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Question 1 of 18. P On November 1, Beer Inc purchased a new machine for $200,000. The company paid $5,900 to have the machine delivered to its shop and $2,800 to install the machine. In addition, Beer Inc paid $1,800 of interest to borrow money from the bank to purchase the machinery, and $5,000 to insure the machine for the first year of use. Beer Inc also paid $8,000 for improvements to the machine that are expected to enhance its efficiency. What total amount will the company capitalize on its balance sheet for this machine asset? Question 2 of 18 Rosenbaum Ltd has equipment with a historical cost of $33,000 and accumulated depreciation of $15,000. If Rosenbaum Ltd sells the equipment and receives $16,200 cash for the sale, what will be the effect of the sale on Rosenbaum Ltd's net income (ignoring taxes)? If this transaction will add to the company's net income, make your answer positive. If this transaction will reduce the company's net income, make your answer negative. Effect on Net Income:
Transcribed Image Text:Question 1 of 18. P On November 1, Beer Inc purchased a new machine for $200,000. The company paid $5,900 to have the machine delivered to its shop and $2,800 to install the machine. In addition, Beer Inc paid $1,800 of interest to borrow money from the bank to purchase the machinery, and $5,000 to insure the machine for the first year of use. Beer Inc also paid $8,000 for improvements to the machine that are expected to enhance its efficiency. What total amount will the company capitalize on its balance sheet for this machine asset? Question 2 of 18 Rosenbaum Ltd has equipment with a historical cost of $33,000 and accumulated depreciation of $15,000. If Rosenbaum Ltd sells the equipment and receives $16,200 cash for the sale, what will be the effect of the sale on Rosenbaum Ltd's net income (ignoring taxes)? If this transaction will add to the company's net income, make your answer positive. If this transaction will reduce the company's net income, make your answer negative. Effect on Net Income:
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