was purchased and a piece of equipment that was constructed during the 2020 fiscal year: Machinery Cash paid for machinery, including sales tax of $10,150 and recoverable GST of $7,250 Freight and insurance cost while in transit Cost of moving machinery into place at factory Wage cost for technicians to test machinery Materials cost for testing Insurance premium paid on the machinery for its first year of operation Special plumbing fixtures required for new machinery Repair cost on machinery incurred in first year of operations Cash received from provincial government as incentive to purchase machinery Profit on self-construction Cost of installing equipment Calculate the cost of the machinery and the cost of the equipment. Equipment (Self-Constructed) Material and purchased parts (gross cost $219,000; failed to take 3% cash discount; the company uses the net method of recording purchases of material and parts) Imputed interest on funds used during construction (Note: The company has no borrowing costs but it has calculated imputed interest on its equity/ share financing) Labour costs for manufacturing the equipment Overhead costs (fixed $22,700; variable $29,400) (a) Cost of the machinery (b) Cost of the equipment $162,400 2,450 3,400 3,800 560 $ 1,600 8,260 1,200 27,000 $219,000 14,300 193,000 52,100 32,200 4,600
was purchased and a piece of equipment that was constructed during the 2020 fiscal year: Machinery Cash paid for machinery, including sales tax of $10,150 and recoverable GST of $7,250 Freight and insurance cost while in transit Cost of moving machinery into place at factory Wage cost for technicians to test machinery Materials cost for testing Insurance premium paid on the machinery for its first year of operation Special plumbing fixtures required for new machinery Repair cost on machinery incurred in first year of operations Cash received from provincial government as incentive to purchase machinery Profit on self-construction Cost of installing equipment Calculate the cost of the machinery and the cost of the equipment. Equipment (Self-Constructed) Material and purchased parts (gross cost $219,000; failed to take 3% cash discount; the company uses the net method of recording purchases of material and parts) Imputed interest on funds used during construction (Note: The company has no borrowing costs but it has calculated imputed interest on its equity/ share financing) Labour costs for manufacturing the equipment Overhead costs (fixed $22,700; variable $29,400) (a) Cost of the machinery (b) Cost of the equipment $162,400 2,450 3,400 3,800 560 $ 1,600 8,260 1,200 27,000 $219,000 14,300 193,000 52,100 32,200 4,600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 10-2
Crane Corp., a public company located in Manitoba, both purchases and constructs various pieces of machinery and equipment that it uses in its operations. The following items are for machinery that
was purchased and a piece of equipment that was constructed during the 2020 fiscal year:
Machinery
Cash paid for machinery, including sales tax of $10,150 and recoverable GST of $7,250
Freight and insurance cost while in transit
Cost of moving machinery into place at factory
Wage cost for technicians to test machinery
Materials cost for testing
Insurance premium paid on the machinery for its first year of operation
Special plumbing fixtures required for new machinery
Repair cost on machinery incurred in first year of operations
Cash received from provincial government as incentive to purchase machinery
(a) Cost of the machinery
(b) Cost of the equipment
Equipment (Self-Constructed)
Material and purchased parts (gross cost $219,000; failed to take 3% cash discount; the company uses the net method of recording purchases of material and parts) $219,000
Imputed interest on funds used during construction (Note: The company has no borrowing costs but it has calculated imputed interest on its equity/ share financing)
Labour costs for manufacturing the equipment
14,300
193,000
Overhead costs (fixed $22,700; variable $29,400)
Profit on self-construction
52,100
32,200
4,600
Cost of installing equipment
Calculate the cost of the machinery and the cost of the equipment.
$
$162,400
2,450
3,400
3,800
560
$
1,600
8,260
1,200
27,000
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