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

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