Western Wholesale Foods incurs the following expenditures during the current fiscal year. Required: How should Western account for each of these expenditures?
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- During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated seven machines for $250,000 to improve efficiency in production of their remaining useful life of eight years Low-cost repairs throughout the year totaled $79,000 Replaced a broken gear on a machine for $6,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?Western Wholesale Foods incurs the following expenditures during the current fiscal year. How should Western account for each of these expenditures? 1. Salaries for the repair technicians, $145,000 2. Remodeling of the executive offices, $85,900 3. Annual maintenance costs related to its machinery, $75,500 4. Improvement of the production line resulting in an increase in productivity, $39,200 5. Addition of a sprinkler system to the manufacturing facility to reduce the risk of fire damage, $43,400Hanoi Foods incurs the following expenditures during the current fiscal year: (1) annual maintenance on its machinery, $8,900; (2) remodeling of offices, $42,000; (3) improvement of the shipping and receiving area, resulting in an increase in productivity, $25,000; and (4) addition of a security system to the manufacturing facility, $35,000. How should Hanoi account for each of these expenditures?
- Demmert Manufacturing incurred the following expenditures during the current fiscal year: annual maintenance on its equipment, $5,400; remodeling of offices, $22,000; rearrangement of the shipping and receiving area resulting in an increase in productivity, $35,000; addition of a security system to the manufacturing facility, $25,000. How should Demmert account for each of these expenditures?During the year just ended, Morton Company made the following expenditures relating to its plant building: Continuing and frequent repairs P1,600,000 Repainted the plant building 400,000 Major improvements to the electrical wiring system 1,280,000 Partial replacement of roof tiles 560,000 How much should be charged to repair and maintenance expense during the year just ended?Demmert Production spent the following money in the current fiscal year: $5,400 on equipment yearly maintenance; $22,000 on refurbishing offices; $35,000 on improving efficiency in the shipping and receiving area; and $25,000 on installing a security system in the manufacturing plant. What is Demmert supposed to do with all of these bills?
- Larkspur Utilities Corporation incurred the following costs in constructing a new maintenance building during the fiscal period: Direct labour costs incurred up to the point when the building is in a condition necessary for use as management intended, but before Larkspur begins operating in the building, $81,700 Additional direct labour costs incurred before Larkspur begins operating in the building, $5,770 Material purchased for the building, $82,500 Interest on the loan to finance construction until completion, $2,890 Allocation of variable plant overhead based on labour hours worked on the building, $34,000 f. Architectural drawings for the building, $7,750 Allocation of the president's salary, $56,700 a. b. C. d. e. g. What costs should be included in the cost of the new building if Larkspur prepares financial statements in accordance with IFRS? With ASPE? (Assume that, if there is no specific guidance from GAAP, Larkspur's management would consider a building ready for productive…A company has the following expenditures during the year. 1) Advertising 100,000, 2) employee training 80,000, and Customer outreach and consultation 50,000. The company believes that these efforts have increased the fair value of the entire company by $325,000. How much goodwill can the company recognize at the end of the year associated with these expenditures?Betterment versus Maintenance Expenditures During the year, Graham International made the following expenditures relating to plant, machinery, and equipment: Completed regularly scheduled repairs at a cost of $300,000. Overhauled several stamping machines at a cost of $550,000 to improve production efficiency. Replaced a broken cooling pump on a 100-ton press at a cost of $30,000. Required Identify which expenditures should be expensed as a maintenance expense or capitalized as a betterment outlay. Total amount charged as maintenance expense for the year: $Answer Total amount charged as betterment outlays for the year: $Answer
- Sub Sandwiches of America made the following expenditures related to its restaurant: 1. Replaced the heating equipment at a cost of $250,000. 2. Covered the patio area with a clear plastic dome and enclosed it with glass for use during the winter months. The total cost of the project was $750,000. 3. Performed annual building maintenance at a cost of $24,000. 4. Paid for annual insurance for the facility at $8,800. 5. Built a new sign above the restaurant, putting the company name in bright neon lights, for $9,900. 6. Paved a gravel parking lot at a cost of $65,000. Required: Sub Sandwiches of America credits Cash for each of these expenditures. Indicate the account itdebits for each.Spacely Sprockets, Inc. invested $4,995,000 for new manufacturing equipment for its plant in Jetson, NY. The equipment was anticipated to have a useful life of 11 years, or 29,800 machine hours and a residual value of $507,000. In its first year in operation the equipment was used for 2,180 hours and an additional 2,700 hours in its second year of usage.The Income Statement for years 1 and 2 of Spacely Sprockets, Inc. are shown below.All items rounded to nearest whole dollar. Spacely Sprockets, Inc. Year 1 Year 2 Net Sales $35,590,000 $36,164,000 COGS $23,120,000 $22,978,000 Gross Profit $12,470,000 $13,186,000 Operating Expenses(before adding in Depreciation) $7,650,000 $8,152,000 Income from Operations $4,820,000 $5,034,000 Income Tax Expense (at 30%) $1,446,000 $1,510,200 Net Income $3,374,000 $3,523,800 Round all items to the nearest whole dollar and use rounded values for all future calculations.1. Calculate the depreciation expense for year 1 and 2 using…West Coast Growers incurs the following costs during the year related to the creation of a new disease-resistant tomato plant.Salaries for R&D $ 540,000 Depreciation on R&D facilities and equipment 145,000 Utilities incurred for the R&D facilities 7,000 Patent filing and related legal costs 27,000 Payment to another company for part of the development work 13,000What amount should West Coast Growers report as research and development (R&D) expense in its income statement?