Sparky purchased Equipment for $250,000, terms 2/10, n/30. In addition, Sparky paid forshipping to get the equipment delivered at a cost of $800, and installation at a cost of $1,200.During installation, it was determined that the electrical wiring in the room within the building thatwill house the new equipment was not adequate to support its functionality, and had to be re-wired at a cost of $1,500. Two employees performed a trial run on the new equipment to ensureit was in good working order. The trial run took 4 hours to complete, each employee is paid $30per hour and the cost of raw materials used in the testing was $1,400.Determine the original cost of the Equipment: $$250,140$255,140$255,020$253,520 Construction of the new office building began on February 1 and was completed on December31, 20x1. Construction expenditures paid to sub-contractors were made according to the tablebelow. The first expenditure made on Feb 1 included land costs of $200,000.Feb 1May 1Aug 1Nov 1Dec 31010$4,650,000$4,818,000$ 900,000Sparky borrowed a $2,100,000, 8%, 2-year note on February 1st to help finance construction.Interest will be paid annually. The company's only other outstanding debt during all of 20x1 was a$3,000,000, 9%, 10-year note payable, with interest being paid annually.$4,844,500$1,200,000Determine the Original Cost of the Office Building after taking into consideration the capitalizationof interest: $$4,850,000$1,500,000$ 750,000$ 500,000

Fixed assets (or non-current assets/ long-term assets) Fixed assets are those that have been fixed…

Sparky purchased Equipment for $250,000, terms 2/10, n/30. In addition, Sparky paid for shipping to get the equipment delivered at a cost of $800, and installation at a cost of $1,200. During installation, it was determined that the electrical wiring in the room within the building that will house the new equipment was not adequate to support its functionality, and had to be re- wired at a cost of $1,500. Two employees performed a trial run on the new equipment to ensure it was in good working order. The trial run took 4 hours to complete, each employee is paid $30 per hour and the cost of raw materials used in the testing was $1,400. Determine the original cost of the Equipment: $250,140 $255,140 $255,020 $253,520

Sparky purchased Equipment for $250,000, terms 2/10, n/30. In addition, Sparky paid for shipping to get the equipment delivered at a cost of $800, and installation at a cost of $1,200. During installation, it was determined that the electrical wiring in the room within the building that will house the new equipment was not adequate to support its functionality, and had to be re- wired at a cost of $1,500. Two employees performed a trial run on the new equipment to ensure it was in good working order. The trial run took 4 hours to complete, each employee is paid $30 per hour and the cost of raw materials used in the testing was $1,400. Determine the original cost of the Equipment: $250,140 $255,140 $255,020 $253,520

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

Carla Vista Corp. purchased land as a factory site for $330000. They paid $10400 to tear down two buildings on the land, and the salvage from these old buildings was sold for $1330. Legal fees of $840 were paid for title investigation and making the purchase. Architect's fees were $10490. Title insurance cost $620, and liability insurance during construction cost $650. Excavation costs were $3430. A contractor was paid $657000 to construct the new building. An assessment made by the city for pavement was $1690. Interest costs during construction were $43000. The cost of the land should be recorded at Select answer from the options below $342930. $344620. $340530. $342220.
Lavoie Corporation acquired new equipment at a cost of $100,000 plus 7% provincial sales tax and 5% GST. (GST is a recoverable tax.) The company paid $1,700 to transport the equipment to its plant. The site where the equipment was to be placed was not yet ready and Lavoie Corporation spent another $500 for one month's storage costs. When installed, $300 in labour and $200 in materials were used to adjust and calibrate the machine to the company's exact specifications. The units produced in the trial runs were subsequently sold to employees for $400. During the first two months of production, the equipment was used at only 50% of its capacity. Labour costs of $3,000 and material costs of $2,000 were incurred in this production, while the units sold generated $5,500 of sales. Lavoie paid an engineering consulting firm $11,000 for its services in recommending the specific equipment to purchase and for help during the calibration phase. Borrowing costs of $800 were incurred because of the…
Holiday Laboratories purchased a high-speed industrial centrifuge at a cost of $480,000. Shipping costs totaled $14,200. Foundation work to house the centrifuge cost $9,300. An additional water line had to be run to the equipment at a cost of $3,200. Labor and testing costs totaled $7,600. Materials used up in testing cost $3,900. (Leave no cells blank. Enter O where needed.) Required: 1. What is the total capitalized cost of the equipment? 2. How much of this amount should be expensed immediately? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the total capitalized cost of the equipment? Cost of the equipment Required 1 Required 2 >
Nash Co, recently installed some new computer equipment. To prepare for the installation, Nash had some electrical work done in what was to become the server room, costing $20,600. The invoice price of the server equipment was $200,000. Three printers were also purchased at a cost of $1,900 each. The software for the system was an additional $46,200. The server equipment was believed to have a useful life of eight years, but due to the heavy anticipated usage, the printers were expected to have only a four-year useful life. The software to run the system was estimated to require a complete upgrade in five years to avoid obsolescence. Additionally, it cost $12.600 for delivery. All of the above costs were subject to a 6% non-refundable provincial sales tax. During the installation, a training course was conducted for the staff that would be using the new equipment, at a cost of $9,550. Assume that Nash follows IFRS, and that any allocation of common costs is done to the nearest 1%…
Uramilaben
Tree Lovers Inc. purchased 100 acres of woodland in which the company intends to harvest the complete forest, leaving the land barren and worthless. Tree Lovers paid $3,000,000 for the land. Tree Lovers will sell the lumber as it is harvested and expects to deplete it over five years (23 acres in year one, 30 acres in year two, 24 acres in year three, 10 acres in year four, and 13 acres in year five). Calculate the depletion expense for the next five years. Year 1 $ Year 2 Year 3 $ Year 4 Year 5 Prepare the journal entry for year one. If an amount box does not require an entry, leave it blank. %24 %24 %24 %24 %24
1) Rocky Mountain Water Corporation paid $270,000 to purchase equipment for use in its manufacturing operations. In addition, Rocky Mountain Water Corporation incurred the following expenditures relating to the equipment: · $1,500 freight to have the equipment shipped to its manufacturing facility · $750 insurance while the equipment was in transit · $3,200 for special steel and concrete reinforcements used to house the equipment in the factory · $1,200 for a one-year insurance policy on the equipment after it has been installed · $300 to test the equipment before it is placed in service · $400 for maintenance costs during the first year of service Calculate the cost of the equipment.
Peace Co. purchased land as a factory site for P300,000. Peace paid P30,000 to tear down two building on the land. Salvage was sold for P2,700. Legal fees of P1,740 were paid for title investigation and making the purchase. Architect's fees were P15,600. Land Title insurance cost P1,200. Liability insurance during construction cost, P1300. Excavation cost P5,220. The contractor was paid P1,100,000. An assessment made by the city for pavement was P3,200. Interest costs during construction were P85,000. The cost of the land is The cost of the building is a. 1,201,900b. 1,207,120c. 1,234,420d. none of these
Northwest Delivery Company acquired an adjacent lot to construct a new warehouse, paying $75,000 and giving a short-term note for $90,000. Legal fees paid were $2,500, delinquent taxes assumed were $22,400, and fees paid to remove an old building from the land were $14,500. Materials salvaged from the demolition of the building were sold for $7,500. A contractor was paid $660,000 to construct a new warehouse. Determine the Cost of the land to be reported on the balance sheet.
Jacobson Company purchased a parcel of land for a new office building. The cost of the land was $310,000. An old building on the property wad demolished and construction began on the new building. All of this activity occurred within the same year. Costs included demolition ($37,000), architect fees on the new building design ($64,000), legal fees for land title investigation ($3,100), and construction ($768,000). At what amount should Jacobson Company record the cost the cost of the building? A B C D $768,000 $832,000 $869,000 $1,078,000
in the new building? 40. In January, Prahbu purchased for $90,000 a new machine for use in an existing production line of his manufacturing business. Assume that the machine is a unit of property and is not a material or supply. Prahbu pays $2,500 to install the machine, and after the machine is installed, he pays $1,300 to perform a critical test on the machine to ensure that it will operate in accordance with quality standards. On November 1, the critical test is complete, and Prahbu places the machine in service on the production line. On December 3, Prahbu pays another $3,300 to perform periodic quality control testing after the machine is placed in service. How much will Prahbu be required to capitalize as the cost of the machine? Donn 11 LO 2-1 resear
A company purchased a 10-ton draw press at a cost of $181,000 with terms of 215/,n45./215,n45. Payment was made within the discount period. Shipping costs were $4,200, which included $230 for insurance in transit. Installation costs totaled $11,300, which included $4,800 for taking out a section of a wall and rebuilding it because the press was too large for the doorway. The capitalized cost of the 10-ton draw press is: