Wonder Mountain Company operates a snow sports resort for skiers and snowboarders. The company has recently decided to replace an existing old chair lift with a new high-speed quad chair and expand the hill to allow for increased capacity. The chair lift was a $886,000 asset on the books, 90% depreciated. The work was completed from April to November. Wonder Mountain incurred the following costs for the expansion: Invoice price high-speed quad chair lift Costs to dismantle old chair lift Cash received for sale used chair lift Shipping costs for delivery $1,822,000 32,900 182,200 21,820 Landscape architect fees, grading expansion hill Permit costs 9,120 6,160 Clearing trees/grading land for expansion Installation of concrete bases for chair lift 50,500 110,000 Helicopter rental to install towers for chair lift 96,000 Labour installation ski lift 330,000 Training employees on maintenance and operation 10,300 Testing of chair lift 32,200 Interest costs on loan for construction General overhead costs Annual routine maintenance Purchase tools required for annual maintenance 72,000 35,600 51,400 88,600 Required: Calculate the total cost for each asset: a. Land b. Ski lift C Tools Total cost

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Wonder Mountain Company operates a snow sports resort for skiers and snowboarders. The company has recently decided to replace
an existing old chair lift with a new high-speed quad chair and expand the hill to allow for increased capacity. The chair lift was a
$886,000 asset on the books, 90% depreciated. The work was completed from April to November. Wonder Mountain incurred the
following costs for the expansion:
Invoice price high-speed quad chair lift
Costs to dismantle old chair lift
Cash received for sale used chair lift
Shipping costs for delivery
Landscape architect fees, grading expansion hill
Permit costs
Clearing trees/grading land for expansion
Installation of concrete bases for chair lift
Helicopter rental to install towers for chair lift
Labour installation ski lift
Training employees on maintenance and operation
Testing of chair lift
Interest costs on loan for construction
General overhead costs
Annual routine maintenance
Purchase tools required for annual maintenance
Required:
Calculate the total cost for each asset:
Total cost
a. Land
b. Ski lift
C. Tools
1
$1,822,000
32,900
182,200
21,820
9,120
6,160
50,500
110,000
96,000
330,000
10,300
32,200
72,000
35,600
51,400
88,600
Transcribed Image Text:Wonder Mountain Company operates a snow sports resort for skiers and snowboarders. The company has recently decided to replace an existing old chair lift with a new high-speed quad chair and expand the hill to allow for increased capacity. The chair lift was a $886,000 asset on the books, 90% depreciated. The work was completed from April to November. Wonder Mountain incurred the following costs for the expansion: Invoice price high-speed quad chair lift Costs to dismantle old chair lift Cash received for sale used chair lift Shipping costs for delivery Landscape architect fees, grading expansion hill Permit costs Clearing trees/grading land for expansion Installation of concrete bases for chair lift Helicopter rental to install towers for chair lift Labour installation ski lift Training employees on maintenance and operation Testing of chair lift Interest costs on loan for construction General overhead costs Annual routine maintenance Purchase tools required for annual maintenance Required: Calculate the total cost for each asset: Total cost a. Land b. Ski lift C. Tools 1 $1,822,000 32,900 182,200 21,820 9,120 6,160 50,500 110,000 96,000 330,000 10,300 32,200 72,000 35,600 51,400 88,600
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