Robert placed the following assets into service fir his packing and shipping company this year apr 3 desk with a basus of $1100 july 30 computer software with a basis of $4200 oct 30 delivery truck with a basis of $33,000
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Robert placed the following assets into service fir his packing and shipping company this year
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- Ace Lumber Co. purchased a truck and had the following outlays. How much is the cost of the truck? purchase price $ 40,000 sales tax 3,200 preparation and delivery 900 insurance during delivery 325 insurance after delivery 1,200 cost of the truck ? ________________________________Speed-ee Delivery is purchasing a new truck for its fleet. It pays the following costs at the time of the purchase. Cost Amount Purchase Price $ 60,000 Title Fees 1,800 Sales Tax 4,200 Insurance for the 1st year 3,000 What is the amount that Speed-ee Delivery will record as an Equipment asset for the purchase of the truck?Oaktree Company purchased new equipment and made the following expenditures: Purchase price $45,000 2,200 Sales tax Freight charges for shipment of equipment Insurance on the equipment for the first year Installation of equipment 700 900 1,000 The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Prepare the necessary journal entries to record the above expenditures.
- JOOVI Inc. has recently purchased and installed a new machine for its manufacturingplant. Th e company incurred the following costs:Purchase price $12,980Freight and insurance $1,200Installation $700Testing $100Maintenance staff training costs $500Th e total cost of the machine to be shown on JOOVI’s balance sheet is closest to:A. $14,180.B. $14,980.C. $15,480.3 Hummer Company purchased a delivery truck. The total cash payment was $30,000, including the following items. Explain how each of these costs would be accounted for. Negotiated purchase price $24,000 Installation of special shelving 1,200 Painting and lettering 1,000 Motor vehicle license 180 Annual insurance policy 2,400 Sales 7-2atax 1,400 Total paid $30,180Ngo Company purchased a truck for $54,000. Sales tax amounted to $5,400; shipping costs amounted to $1,200; and one-year registration of the truck was $100. What is the total amount of costs that should be capitalized? A. $60,600 B. $66,100 C. $54,000 D. $59,400
- St. Johns Medical Center (SJMC) has five medical technicians who are responsible for conducting cardiac catheterization testing in SJMCs Cath Lab. Each technician is paid a salary of 36,000 and is capable of conducting 1,000 procedures per year. The cardiac catheterization equipment is one year old and was purchased for 250,000. It is expected to last five years. The equipments capacity is 25,000 procedures over its life. Depreciation is computed on a straight-line basis, with no salvage value expected. The reading of the catheterization results is conducted by an outside physician whose fee is 120 per test. The technicians report with the outside physicians note of results is sent to the referring physician. In addition to the salaries and equipment, SJMC spends 50,000 for supplies and other costs needed to operate the equipment (assuming 5,000 procedures are conducted). When SJMC purchased the equipment, it fully expected to perform 5,000 procedures per year. In fact, during its first year of operation, 5,000 procedures were run. However, a larger hospital has established a clinic in the city and will siphon off some of SJMCs business. During the coming years, SJMC expects to run only 4,200 cath procedures yearly. SJMC has been charging 850 for the procedureenough to cover the direct costs of the procedure plus an assignment of general overhead (e.g., depreciation on the hospital building, lighting and heating, and janitorial services). At the beginning of the second year, an HMO from a neighboring community approached SJMC and offered to send its clients to SJMC for cardiac catheterization provided that the charge per procedure would be 550. The HMO estimates that it can provide about 500 patients per year. The HMO has indicated that the arrangement is temporaryfor one year only. The HMO expects to have its own testing capabilities within one year. Required: 1. Classify the resources associated with the cardiac catheterization activity into one of the following: (1) committed resources, or (2) flexible resources. 2. Calculate the activity rate for the cardiac catheterization activity. Break the activity rate into fixed and variable components. Now, classify each activity resource as relevant or irrelevant with respect to the following alternatives: (1) accept the HMO offer, or (2) reject the HMO offer. Explain your reasoning. 3. Assume that SJMC will accept the HMO offer if it reduces the hospitals operating costs. Should the HMO offer be accepted? 4. Jerold Bosserman, SJMCs hospital controller, argued against accepting the HMOs offer. Instead, he argued that the hospital should be increasing the charge per procedure rather than accepting business that doesnt even cover full costs. He also was concerned about local physician reaction if word got out that the HMO was receiving procedures for 550. Discuss the merits of Jerolds position. Include in your discussion an assessment of the price increase that would be needed if the objective is to maintain total revenues from cardiac catheterizations experienced in the first year of operation. 5. Chandra Denton, SJMCs administrator, has been informed that one of the Cath Lab technicians is leaving for an opportunity at a larger hospital. She met with the other technicians, and they agreed to increase their hours to pick up the slack so that SJMC wont need to hire another technician. By working a couple hours extra every week, each remaining technician can perform 1,050 procedures per year. They agreed to do this for an increase in salary of 2,000 per year. How does this outcome affect the analysis of the HMO offer? 6. Assuming that SJMC wants to bring in the same revenues earned in the cardiac catheterization activitys first year less the reduction in resource spending attributable to using only four technicians, how much must SJMC charge for a procedure?Xpress Delivery Service completed the following transactions and events involving the purchase and operation of equipment for its business. 20X0 Jan. 1 Paid $24,950 cash plus $1,950 in sales tax for a new delivery van that was estimated to have a five-year life and a $3,400 salvage value. Van costs are recorded in the Equipment account. Jan. 3 Paid $1,550 to install sorting racks in the van for more accurate and quicker delivery of packages. This increases the estimated salvage value of the van by another $200. Dec. 31 Recorded annual straight-line depreciation on the van. 20X1 Jan. 1 Paid $1,970 to overhaul the van’s engine, which increased the van’s estimated useful life by two years. May 10 Paid $600 to repair the van after the driver backed it into a loading dock. Dec. 31 Record annual straight-line depreciation on the van. (Round to the nearest dollar.) Required Prepare journal entries to record these transactions and events.The following data are accumulated by Waiola Company in evaluating the purchase of $120,000 of equipment, having a 4-year useful life: Year Net Income Net Cash Flow Year 1 $45,000 $75,000 Year 2 28,000 58,000 Year 3 19,500 49,500 Year 4 (7,000) 37,000 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet a. Assuming that the desired rate of return is 6%, determine the net present value for the proposal. If required, round to the nearest dollar.Net present value fill in the blank 1 of 1$
- Stilton Ltd purchases a new delivery truck for $80,000 . The logo of the company is painted on the side of the truck for $1,000 . The truck registration is $500 , and a 12 -month accident insurance policy is $1,500 . The truck undergoes safety testing for $660 . What does Stilton Ltd record as the cost of the new truck? Select one: a. $81,660 . b. $80,000 . c. $83,060 . d. $81,000On 1 May 2020, Ron Trading purchased a new machine. The following paymentsrelate to the machine.List price $21,500Purchase discount $2,000Transportation cost $300Repair of damage parts incurred in transporting the machine $1,000Fees paid to test the machine before use $500Fees paid to the installer to install the machine $800Machine operator’s salary for the first month of operation $3,000Maintenance costs for the first month of operation $300(i) Identify and compute the cost of the machine to be recognised. Explainyour reasoning.(ii) Journalise the transactions. Assume the above payments are paid in cash.A company purchased new equipment for $65,000. The company paid cash for the equipment. Other costs associated with the equipment were: transportation costs, $1,250; sales tax paid $4,000; and installation cost, $3,000. The cost recorded for the equipment was: Multiple Choice $65,000. $70,250. $73.250
