Wonder Mountain Company operates a snow sports resort for skiers and snowboarders. The company has recently decided to replacean 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 thefollowing costs for the expansion:Invoice price high-speed quad chair liftCosts to dismantle old chair liftCash received for sale used chair liftShipping costs for deliveryLandscape architect fees, grading expansion hillPermit costsClearing trees/grading land for expansionInstallation of concrete bases for chair liftHelicopter rental to install towers for chair liftLabour installation ski liftTraining employees on maintenance and operationTesting of chair liftInterest costs on loan for constructionGeneral overhead costsAnnual routine maintenancePurchase tools required for annual maintenanceRequired:Calculate the total cost for each asset:Total costa. Landb. Ski liftC. Tools1$1,822,00032,900182,20021,8209,1206,16050,500110,00096,000330,00010,30032,20072,00035,60051,40088,600

Cost of an asset is the amount paid for an asset and for expenses incurred in putting the asset in…

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

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

Section: Chapter Questions

Problem 1Q

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