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Question 2 Al Hajar Electronics LLC Asset Acquisition and Depreciation On 1st April 2022, Al Hajar Electronics LLC, a company based in Oman specializing in retailing high-quality electronic goods, acquires a new refrigeration system for its main warehouse from CoolTech Solutions. The financial and operational details of the purchase are as follows: OMR: • List price of the refrigeration system: 62,000 • Import duty: 1,200 • Delivery fees: 1,750 Installation costs: 6,500 FA 2 Assignment Brief Spring 2024 . Pre-production testing: 3,600 Purchase of a four-year service agreement with CoolTech Solutions: 5,500 Additionally, Al Hajar Electronics LLC was granted a trade discount of 15% on the initial list price of the refrigeration system and a settlement discount of 5% if payment was made within 30 days of purchase. The payment for the refrigeration system was completed on 20th April 2022. The refrigeration system is estimated to have a useful life of 8 years with a potential salvage value of OMR 6,250 at the end of its use. The estimated usage is 70,000 cooling hours over its lifetime. In the year 2022, Al Hajar Electronics LLC uses the refrigeration system for 900 hours.

Question 2 Al Hajar Electronics LLC Asset Acquisition and Depreciation On 1st April 2022, Al Hajar Electronics LLC, a company based in Oman specializing in retailing high-quality electronic goods, acquires a new refrigeration system for its main warehouse from CoolTech Solutions. The financial and operational details of the purchase are as follows: OMR: • List price of the refrigeration system: 62,000 • Import duty: 1,200 • Delivery fees: 1,750 Installation costs: 6,500 FA 2 Assignment Brief Spring 2024 . Pre-production testing: 3,600 Purchase of a four-year service agreement with CoolTech Solutions: 5,500 Additionally, Al Hajar Electronics LLC was granted a trade discount of 15% on the initial list price of the refrigeration system and a settlement discount of 5% if payment was made within 30 days of purchase. The payment for the refrigeration system was completed on 20th April 2022. The refrigeration system is estimated to have a useful life of 8 years with a potential salvage value of OMR 6,250 at the end of its use. The estimated usage is 70,000 cooling hours over its lifetime. In the year 2022, Al Hajar Electronics LLC uses the refrigeration system for 900 hours.

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 62E
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Question 2 Al Hajar Electronics LLC Asset Acquisition and Depreciation On 1st April 2022, Al Hajar Electronics LLC, a company based in Oman specializing in retailing high-quality electronic goods, acquires a new refrigeration system for its main warehouse from CoolTech Solutions. The financial and operational details of the purchase are as follows: OMR: • List price of the refrigeration system: 62,000 • Import duty: 1,200 • Delivery fees: 1,750 Installation costs: 6,500 FA 2 Assignment Brief Spring 2024 . Pre-production testing: 3,600 Purchase of a four-year service agreement with CoolTech Solutions: 5,500 Additionally, Al Hajar Electronics LLC was granted a trade discount of 15% on the initial list price of the refrigeration system and a settlement discount of 5% if payment was made within 30 days of purchase. The payment for the refrigeration system was completed on 20th April 2022. The refrigeration system is estimated to have a useful life of 8 years with a potential salvage value of OMR 6,250 at the end of its use. The estimated usage is 70,000 cooling hours over its lifetime. In the year 2022, Al Hajar Electronics LLC uses the refrigeration system for 900 hours.
Transcribed Image Text:Question 2 Al Hajar Electronics LLC Asset Acquisition and Depreciation On 1st April 2022, Al Hajar Electronics LLC, a company based in Oman specializing in retailing high-quality electronic goods, acquires a new refrigeration system for its main warehouse from CoolTech Solutions. The financial and operational details of the purchase are as follows: OMR: • List price of the refrigeration system: 62,000 • Import duty: 1,200 • Delivery fees: 1,750 Installation costs: 6,500 FA 2 Assignment Brief Spring 2024 . Pre-production testing: 3,600 Purchase of a four-year service agreement with CoolTech Solutions: 5,500 Additionally, Al Hajar Electronics LLC was granted a trade discount of 15% on the initial list price of the refrigeration system and a settlement discount of 5% if payment was made within 30 days of purchase. The payment for the refrigeration system was completed on 20th April 2022. The refrigeration system is estimated to have a useful life of 8 years with a potential salvage value of OMR 6,250 at the end of its use. The estimated usage is 70,000 cooling hours over its lifetime. In the year 2022, Al Hajar Electronics LLC uses the refrigeration system for 900 hours.
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