Required information [The following information applies to the questions displayed below.] At the beginning of the year, Mitt Corporation bought machinery, shelving, and a forklift. The machinery initially cost $30,800 but had to be overhauled (at a cost of $2,240) before it could be installed (at a cost of $1,120) and finally put into use. The machinery's total life was estimated as 40,000 hours, with an estimated residual value of $1,000. The machinery was actually used 5,000 hours in year 1 and 7,000 hours in year 2. Repair costs were $480 in each year. The shelving cost $9,950 and was expected to last 5 years, with a residual value of $730. The forklift cost $16,650 and was expected to last six years, with a residual value of $2,260. Required: 1. Compute the amount to be capitalized for the machinery. Total cost

Required information [The following information applies to the questions displayed below.] At the beginning of the year, Mitt Corporation bought machinery, shelving, and a forklift. The machinery initially cost $30,800 but had to be overhauled (at a cost of $2,240) before it could be installed (at a cost of $1,120) and finally put into use. The machinery's total life was estimated as 40,000 hours, with an estimated residual value of $1,000. The machinery was actually used 5,000 hours in year 1 and 7,000 hours in year 2. Repair costs were $480 in each year. The shelving cost $9,950 and was expected to last 5 years, with a residual value of $730. The forklift cost $16,650 and was expected to last six years, with a residual value of $2,260. Required: 1. Compute the amount to be capitalized for the machinery. Total cost

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

! Required information [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 $85,400. The machine's useful life is estimated at 20 years, or 402,000 units of product, with a $5,000 salvage value. During its second year, the machine produces 34,200 units of product. Determine the machine's second-year depreciation using the double-declining-balance method. First year's depreciation Second year's depreciation Double-declining-balance Depreciation Choose Factors: X X X X Choose Factor(%) = = Depreciation expense = Annual Depreciation Expense =
Vernon Company is considering the replacement of some of its manufacturing equipment. Information regarding the existing equipment and the potential replacement equipment follows. Existing Equipment Replacement Equipment Cost $ 110,000 Cost $ 114,000 Operating expenses* 105,000 Operating expenses* 112,000 Salvage value 27,000 Salvage value 13,000 Market value 41,000 Useful life 8 years Book value 32,000 Remaining useful life 8 years *The amounts shown for operating expenses are the cumulative total of all such expected expenses to be incurred over the useful life of the equipment.RequiredCalculate the total relevant cost of existing equipment and the potential replacement equipment. Should the equipment be replaced?
Boyer Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $78,100, the accumulated depreciation is $31,200, its remaining useful life is five years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $162,400. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations: PresentOperations ProposedOperations Sales $247,600 $247,600 Direct materials $84,300 $84,300 Direct labor 58,600 — Power and maintenance 5,500 28,900 Taxes, insurance, etc. 2,000 6,500 Selling and administrative expenses 58,600 58,600 Total expenses $209,000…
Boyer Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $54,200, the accumulated depreciation is $21,700, its remaining useful life is five years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $112,700. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations: PresentOperations ProposedOperations Sales $171,800 $171,800 Direct materials $58,500 $58,500 Direct labor 40,700 — Power and maintenance 3,800 20,100 Taxes, insurance, etc. 1,400 4,500 Selling and administrative expenses 40,700 40,700 Total expenses $145,100…
Prepare a depreciation schedule for the following machine: the machine cost $43,000; it has an estimated residual value of $5,300 and expected life of 280,000 units. The units produced were: Year Units Depreciation Book value at the end of each year Year 1 95,000 units Year 2 80,000 units Year 3 50,000 units Year 4 35,500 units Year 5 30,000 units I need help working these problems out. Explain in detail please.
Kim Kwon Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $80,700, the accumulated depreciation is $32,300, its remaining useful life is 5 years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $167,900. The automatic machine has an estimated useful life of 5 years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations: PresentOperations ProposedOperations Sales $255,800 $255,800 Direct materials $87,200 $87,200 Direct labor 60,500 — Power and maintenance 5,600 29,900 Taxes, insurance, etc. 2,000 6,700 Selling and administrative expenses 60,500 60,500 Total expenses $215,800 $184,300…
cop
[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 $83,600. The machine's useful life is estimated at 20 years, or 398,000 units of product, with a $4,000 salvage value. During its second year, the machine produces 33,800 units of product.
Vinubhai
Flint Tooling Company is considering replacing a machine that has been used in its factory for four years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: Old Machine Cost of machine, 10-year life $109,900 Annual depreciation (straight-line) 10,990 Annual manufacturing costs, excluding depreciation 39,400 Annual nonmanufacturing operating expenses 12,800 Annual revenue 94,700 Current estimated selling price of the machine 36,900 New Machine Cost of machine, six-year life $136,800 Annual depreciation (straight-line) 22,800 Estimated annual manufacturing costs, exclusive of depreciation 18,600 Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine. Required: 1. Prepare a differential analysis as of November 8 comparing operations using the present machine (Alternative 1) with…
Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $45,700. The machine's useful life is estimated at 10 years, or 397,000 units of product, with a $6,000 salvage value. During its second year, the machine produces 33,700 units of product. Determine the machine's second-year depreciation and year end book value under the straight-line method. Choose Numerator: / Year 2 Depreciation Year end book value (Year 2) Straight-Line Depreciation Choose Denominator: = = = Annual Depreciation Expense Depreciation expense
[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 $84,200. The machine's useful life is estimated at 20 years, or 391,000 units of product, with a $6,000 salvage value. During its second year, the machine produces 33,100 units of product. Exercise 8-4 (Algo) Straight-line depreciation LO P1 Determine the machine's second-year depreciation and year end book value under the straight-line method. Choose Numerator: / Year 2 Depreciation Year end book value (Year 2) Straight-Line Depreciation Choose Denominator: = Annual Depreciation Expense Depreciation expense