zal Expenditures Budget anuary 1, 20Y6, the controller of Omicron Inc. is planning capital expenditures for the years 20Y6-20Y9. The following inte croller collect the necessary information for the capital expenditures budget: ector of Facilities: A construction contract was signed in late 20Y5 for the construction of a new factory building at a contract construction is scheduled to begin in 20Y6 and be completed in 20Y9. e President of Manufacturing: Once the new factory building is finished, we plan to purchase $1.5 million in equipment in lates ditional $200,000 will be needed early in the following year (20Y8) to test and install the equipment before we can begin prod grow, I expect we'll need to invest another $1,000,000 in equipment in 20Y9. ief Operating Officer: We have really been growing lately. I wouldn't be surprised if we need to expand the size of our new fact least 35%. Fortunately, we expect inflation to have minimal impact on construction costs over the next four years. Additionally, ost of the expansion to be proportional to the size of the expansion. irector of Information Systems: We need to upgrade our information systems to wireless network technology. It doesn't make se fter the new factory building is completed and producing product. During 20Y8, once the factory is up and running, we should equ ith wireless technology. I think it would cost us $800,000 today to install the technology. However, prices have been dropping by should be less expensive at a later date.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question
100%
agenow.com/ilrn/takeAssignment/takeAssignmentMain.do?inprogress=true
to
eBook
Capital Expenditures Budget
On January 1, 20Y6, the controller of Omicron Inc. is planning capital expenditures for the years 20Y6-20Y9. The following interviews helped th
controller collect the necessary information for the capital expenditures budget:
Director of Facilities: A construction contract was signed in late 20Y5 for the construction of a new factory building at a contract cost of $10,000,
The construction is scheduled to begin in 20Y6 and be completed in 20Y9.
Vice President of Manufacturing: Once the new factory building is finished, we plan to purchase $1.5 million in equipment in late 20Y7. I expect th
additional $200,000 will be needed early in the following year (20Y8) to test and install the equipment before we can begin production. If sales cc
to grow, I expect we'll need to invest another $1,000,000 in equipment in 20Y9.
Chief Operating Officer: We have really been growing lately. I wouldn't be surprised if we need to expand the size of our new factory building in 20
at least 35%. Fortunately, we expect inflation to have minimal impact on construction costs over the next four years. Additionally, I would expect t
cost of the expansion to be proportional to the size of the expansion.
Director of Information Systems: We need to upgrade our information systems to wireless network technology. It doesn't make sense to do this unt
after the new factory building is completed and producing product. During 20Y8, once the factory is up and running, we should equip the whole facil
with wireless technology. I think it would cost us $800,000 today to install the technology. However, prices have been dropping by 25% per year, so
should be less expensive at a later date.
Chief Financial Officer: I am excited about our long-term prospects. My only short-term concern is managling our cash flow while we expend the
$4,000,000 of construction costs in 2OY6 and $6,000,000 in 20Y7 on the portion of the new factory building scheduled to be completed in 20Y9.
Use this interview information to prepare a capital expenditures budget for Omicron Inc. for the years 20Y6-20Y9.
Omicron Inc.
Capital Expenditures Budget
For the Four Years Ending December 31, 20Y6-20Y9
Previous
Next
Check My Work
Transcribed Image Text:agenow.com/ilrn/takeAssignment/takeAssignmentMain.do?inprogress=true to eBook Capital Expenditures Budget On January 1, 20Y6, the controller of Omicron Inc. is planning capital expenditures for the years 20Y6-20Y9. The following interviews helped th controller collect the necessary information for the capital expenditures budget: Director of Facilities: A construction contract was signed in late 20Y5 for the construction of a new factory building at a contract cost of $10,000, The construction is scheduled to begin in 20Y6 and be completed in 20Y9. Vice President of Manufacturing: Once the new factory building is finished, we plan to purchase $1.5 million in equipment in late 20Y7. I expect th additional $200,000 will be needed early in the following year (20Y8) to test and install the equipment before we can begin production. If sales cc to grow, I expect we'll need to invest another $1,000,000 in equipment in 20Y9. Chief Operating Officer: We have really been growing lately. I wouldn't be surprised if we need to expand the size of our new factory building in 20 at least 35%. Fortunately, we expect inflation to have minimal impact on construction costs over the next four years. Additionally, I would expect t cost of the expansion to be proportional to the size of the expansion. Director of Information Systems: We need to upgrade our information systems to wireless network technology. It doesn't make sense to do this unt after the new factory building is completed and producing product. During 20Y8, once the factory is up and running, we should equip the whole facil with wireless technology. I think it would cost us $800,000 today to install the technology. However, prices have been dropping by 25% per year, so should be less expensive at a later date. Chief Financial Officer: I am excited about our long-term prospects. My only short-term concern is managling our cash flow while we expend the $4,000,000 of construction costs in 2OY6 and $6,000,000 in 20Y7 on the portion of the new factory building scheduled to be completed in 20Y9. Use this interview information to prepare a capital expenditures budget for Omicron Inc. for the years 20Y6-20Y9. Omicron Inc. Capital Expenditures Budget For the Four Years Ending December 31, 20Y6-20Y9 Previous Next Check My Work
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Performance measurements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education