Answered: Annuel maintenance costs related to its…

Annuel maintenance costs related to its machinery, $71,400 would be an expense in the period occured or would be capitalized and depreciated over the useful life of the asset?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: The cost of a major addition to a long-lived asset should be recorded as an asset and depreciated…

A: True. The cost of a major addition to a long-lived asset should be recorded as an asset and…

Q: For depreciation purposes, what would be the first cost of the new machine(depreciation base)?

A: Depreciation is the charge or expense to be accounted in the books against an asset of the…

Q: Attractions, buildings & equipment, at cost 64,892,000 62,111,000 58,589,000 55,238,000 54,043,000…

A: Total liability = long term liability + current liability Total debt consist of total obligation of…

Q: which of the following statements is not correct? 1) generally accepted accounting principles…

A: The salvage value of an asset is the expected book value of the item after all depreciation has been…

Q: Assume Byron Athletic Products, Inc., purchased conveyor-belt machinery. Requirement 1. Classify…

A: Expenditure refers to an amount that is incurred for purchasing, and installation, of goods or…

Q: Costs incurred internally to create intangibles are required to be a. expensed as incurred b.…

A: Intangible Assets: An intangible asset is a kind of asset that does not have a physical…

Q: The acquisition of a new machine with a purchase price of $80,545, transportation costs of $9,221,…

A: Asset is the resource owned by an entity which are held for generating future revenues.

Q: Assuming an asset w/o a salvage value, what must be its estimated useful life so that the…

A: Sum of the Years Digit Method: Depreciation is calculated using the sum of the years' digits (SYD),…

Q: Determining Fixed Asset's Book Value The balance in the equipment account is $3,900,000, and the…

A: Depreciation expense refers to the cost of fixed asset which has reduced due to usage or wear and…

Q: What is the systematic periodic transfer of the cost of a fixed asset to an expense account during…

A: It is a measure of the wearing out, consumption or other loss of value of depreciable asset arising…

Q: Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in…

A: (a)

Q: Units-of-activity Depreciation A truck acquired at a cost of $450,000 has an estimated residual…

A: Depreciation rate = ( Cost - Salvage value )/ Estimated activity Depreciable cost = Cost - Salvage…

Q: The cost of fixed assets is distributed over the asset's estimated lifetime. This spreading of costs…

A: Fixed Asset: It is a long-term asset and is tangible in nature. Such assets are used by the firm to…

Q: the cost of moving the machine to another manufacturing plant. the cost of a new attachment to the…

A: Cost incurred subsequent to the acquisition of machine needs to be capitalised, which becomes…

Q: The acquisition of a used machine with a purchase price of $44,994, requiring an overhaul costing…

A: Debit to the asset account implies that the business possesses more (for example builds the…

Q: Item First Cost Uniform Annual Benefit Salvage Value Useful Life in Years Machine 1 $1,244,565…

A: When alternative projects have different useful lives, the same common useful life for all projects…

Q: Which of the following costs are capitalized when purchasing a piece of equipment? a. The invoiced…

A: As per IAS 16 when a asset is purchased then capitalize any costs directly attributable to bringing…

Q: Which of the following research and development costs should always be capitalized? a. costs of…

A: Research and development costs can be defined as the efforts of the company that are related to the…

Q: The acquisition of a new machine with a purchase price of $82,058, transportation costs of $7,947,…

A: The cost of the machine includes all the expenses which are incurred to make the asset ready to use.…

Q: Straight-line depreciation per annum is defined as: a. Initial Cost / Useful Life b. Initial Cost…

A: Depreciation refers to the amortization of value or cost of the asset used over a period of life of…

Q: The value of "Property, Plant, & Equipment, net" reported on the balance sheet represents: A) The…

A: Fixed assets are an unavoidable component of every business organization. These assets are useful in…

Q: An intangible asset with a finite useful life should be amortized over:

A: INTRODUCTION Intangible Asset: Any financial or non-financial item that cannot be physically…

Q: An improvement made to a machine increased its production capacity by 25% without extending the…

A: Introduction: Capital expenditure: Expenditure incurred for acquiring fixed assets like Machinery ,…

Q: Consider the following information: Cost Basis, I: $ 201,033 Depreciation Life, N: 8 years Scrap…

A: Computation of Straight-line depreciation: Straightline depreciation=Cost-Scrap ValueDepreciation…

Q: If a company chooses the revaluation model permitted in IAS 16 for measuring non-current assets,…

A: Non-current assets, also known as long-term assets or fixed assets, are resources that a company…

Q: Tally Company paid cash to purchase a long-term operational asset. The cost of the asset will be…

Q: Determining Fixed Asset's Book Value The balance in the equipment account is $3,150,000, and the…

A: Book value of equipment = Cost of equipment - Accumulated depreciation

Q: A non-current asset was acquired for $200,000 on 200-day terms. Which of the following statements…

A: Costs are connected with purchasing business resources, and they're displayed on the business…

Q: 1. HOw much impairment loss is allocated to goodwill? 2. how much impairment loss will be credited…

A: Impairment Loss = Carrying Amount of CGU - Recoverable Amount of CGU

Q: Asset Cost Salvage Value Units of Useful Life Depreciation per Unit ($) Automobile $27,500 $3,500…

A: Depreciation per unit as per units of digits method = (Cost - Salvage value)/Units of Useful Life

Q: The acquisition of a new machine with a purchase price of $96,072, transportation costs of $7,638,…

A: Machinery is a non-current fixed asset used by the company on its factory floor in the manufacturing…

Q: Conceptual Question Identify whether or not each of the following items should be capitalized as…

A: The cost is capitalized when the benefit of the cost is received over the period. Research and…

Q: Addition of a sprinkler system to the manufactoring facility to reduce the risk of fire damage,…

A: Any expense incurred on any asset is either expensed off in the same period or it is capitalized to…

Q: I want to answer this question

A: Step 1: Introduction to the Asset DisposalWhen fixed assets are sold or scrapped at the end of their…

Q: The following data apply to a non-current asset: £ Net realisable value…

A: Given: Net realizable value 5,000 Historic…

Q: with no salvage value. Determine the length of service life necessary if the depreciation method…

A: Depreciation refers to the process of configuring the diminished value of an asset until its value…

Q: Equipment that cost 412000 and on which 191000 of accumulated depreciation has been recorded was…

A: Banks play an active role in the capital market. Banks are active participants in the financial…

Q: accounting treatment of any component

A: Accounting standard IAS 16: Property, Plant and Equipment make a number of recognition, measurement…

Q: All amounts paid to acquire a long lived-asset and to get it ready for its intended use are referred…

A: Long lived assets are things that are owned by the company for an elongated period and are also…

Q: Residual value of an asset refers to the amount that it can fetch at the Oa. End of its life…

A: We need to understand the meaning of residual value to answer this question. Residual value is the…

Question

Annuel maintenance costs related to its machinery, $71,400 would be an expense in the period occured or would be capitalized and depreciated over the useful life of the asset?

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

Expert Solution

Step 1

Correct Answer: Annual maintenance costs related to its machinery, $71,400 would be accounted for repairs and maintenance expenses in the period in which it occurred.

Step by step

Solved in 2 steps

Knowledge Booster

Accounting for Property, Plant and Equipment

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

A fixed asset with a cost of $31,304 and accumulated depreciation of $28,173.60 is sold for $5,321.68. What is the amount of the gain or loss on disposal of the fixed asset?
Which of the following costs is not typically capitalized as part of an asset’s cost? A) initial testing costs B) Purchase price of a service contract for routine maintenance costs C) Costs of insurance during the construction period D) Transportation costs while the asset was in transit E) Installation costs
Compute the declining-balance depreciation schedule for an asset with thefollowing data:
Pina Company purchased equipment and incurred these costs: Cash price Sales taxes Insurance during transit Annual maintenance costs Total costs $25800 O $27090 O $27930 O $25800 O $27480 1290 390 450 $27930 What amount should be recorded as the cost of the equipment?
Which method of deprecaution is used when the cost of an asset is written off in equal amounts over its expected economic life? A fixed instalment B accelerated C sum of the digits D diminishing balance
A limited-life intangible is reported at its ____________. a. replacement cost b. carrying amount unless impaired c. liquidation value d. acquisition cost
onsider the following data on an asset:Cost of the asset, I $235,000Useful life, N 5 yearsSalvage value, S $ 60,000Compute the annual depreciation allowances and theresulting book values, using(a) The straight-line depreciation method.(b) The double-declining-balance method
Which of the following are includable to the cost of property and equipment? Transportation costs on machinery purchased under terms FOB shipping point Interest on loans borrowed to purchase an equipment Installation costs and cost of trial runs of a machinery Repairs on broken glass windows of a purchased buildings prior to occupancy
Please help solve
For project A, what was the calculations for depreciation to get to the final answer of 720 000?
Trinkle Company made several purchases of long-term assets during the year. The details of each purchase are presented here. New Office Equipment 1. List price: $42,600; terms: 2/10, n/30; paid within the discount period. 2. Transportation-in: $880. 3. Installation: $400. 4. Cost to repair damage during unloading: $630. 5. Routine maintenance cost after eight months: $150. Basket Purchase of Copier, Computer, and Scanner for $52,500 with Fair Market Values 1. Copier, $23,421. 2. Computer, $12,027. 3. Scanner, $27,852. Land for New Warehouse with an Old Building Torn Down 1. Purchase price, $83,800. 2. Demolition of building, $4,760. 3. Lumber sold from old building, $1,780. 4. Grading in preparation for new building, $7,900. 5. Construction of new building, $279,000.
Straight line depreciation method Formula: Annual Depreciation Expense = (Cost of the Asset – Salvage Value) / Useful Life of the Asset Where: Cost of the asset is the purchase prtce of the asset Salvage value is the value of the asset at the end of its useful life Useful life of the asset represents the number of periods/ years in which the asset is expected to be used by the company Company A purchases a machine for $100,000 with an estimated salvage value of $20,000 and a useful life of 5 years. Solve using straight line depreciation method. Year Bool value ( beginning of yea) Depreciation Book Value (end of year)r 1 3 4 2.