Exercise 10-1 Cost of plant assets LO C1 Rizio Co. purchases a machine for $10,900, terms 1/10, n/60, FOB shipping point. Rizio paid within the discount period and took the $109 discount. Transportation costs of $246 were paid by Rizio. The machine required mounting and power connections costing $754. Another $355 is paid to assemble the machine and $40 of materials are used to get it into operation. During installation, the machine was damaged and $220 worth of repairs were made. Complete the below table to calculate the cost recorded for this machine.

Exercise 10-1 Cost of plant assets LO C1 Rizio Co. purchases a machine for $10,900, terms 1/10, n/60, FOB shipping point. Rizio paid within the discount period and took the $109 discount. Transportation costs of $246 were paid by Rizio. The machine required mounting and power connections costing $754. Another $355 is paid to assemble the machine and $40 of materials are used to get it into operation. During installation, the machine was damaged and $220 worth of repairs were made. Complete the below table to calculate the cost recorded for this machine.

Accounting

27th Edition

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Chapter10: Long-term Assets: Fixed And Intangible

Section: Chapter Questions

Problem 10.5CP: Communication Godwin Co. owns three delivery trucks. Details for each truck at the end of the most...

See similar textbooks

Exercise 10-1 Cost of plant assets LO C1

Rizio Co. purchases a machine for $10,900, terms 1/10, n/60, FOB shipping point. Rizio paid within the discount period and took the $109 discount. Transportation costs of $246 were paid by Rizio. The machine required mounting and power connections costing $754. Another $355 is paid to assemble the machine and $40 of materials are used to get it into operation. During installation, the machine was damaged and $220 worth of repairs were made.

Complete the below table to calculate the cost recorded for this machine.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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

Exercise 10-1 (Algo) Cost of plant assets LO C1 Rizio Company purchases a machine for $13,400, terms 1/10, n/60, FOB shipping point. Rizio paid within the discount period and took the $134 discount. Transportation costs of $303 were paid by Rizio. The machine required mounting and power connections costing $926. Another $437 is paid to assemble the machine, and $40 of materials are used to get it into operation. During installation, the machine was damaged and $320 worth of repairs were made. Complete the below table to calculate the cost recorded for this machine.
Exercise 8-1 (Algo) Cost of plant assets LO C1 Rizio Company purchases a machine for $14,000, terms 2/10, n/60, FOB shipping point. Rizio paid within the discount period and took the $280 discount. Transportation costs of $316 were paid by Rizio. The machine required mounting and power connections costing $968. Another $456 is paid to assemble the machine, and $40 of materials are used to get it into operation. During installation, the machine was damaged and $350 worth of repairs were made. Complete the below table to calculate the cost recorded for this machine. Amount Included in Cost of Equipment: Invoice price of machine Net purchase price Total cost to be recorded $ 0 0
Exercise 10-2Marigold Co. purchased land as a factory site for $504,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $52,920 to raze the old buildings and sold salvaged lumber and brick for $7,938. Legal fees of $2,331 were paid for title investigation and drawing the purchase contract. Marigold paid $2,772 to an engineering firm for a land survey, and $85,680 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $1,890, and a liability insurance premium paid during construction was $1,134. The contractor’s charge for construction was $3,452,400. The company paid the contractor in two installments: $1,512,000 at the end of 3 months and $1,940,400 upon completion. Interest costs of $214,200 were incurred to finance the construction. Determine the cost of the land and the cost of the building as they should be recorded on the…
QUESTION FOUR Richy Limited has plant that cost R345 000 on 01 January 2016. Installation andmodification costs R69 000 (including vat). Transfer costs paid to lawyer amounted toR20 000. Transport costs for bringing the asset to location amounted to R20 000. Theplant was ready for use on 01 January 2016. The machines were cleaned on 01 March2016 at a cost of R10 000. Due to the low order levels in April 2016 the plant stood idle.Depreciation is provided over its useful life of 5 years using the straight-line method to anil residual value. Richy Limited measures plant under the revaluation model. The plant was revalued asfollows: 31 December 2016 R310 00031 December 2017 R300 00031 December 2018 R250 000 Richy Limited transfers the maximum amount from the realised portion of therevaluation surplus to equity. VAT must be calculated at 15%.Required:Disclose the above information in the notes to the financial statements for years ending2016, 2017 and 2018. (Include in you answer the…
Communication Godwin Co. owns three delivery trucks. Details for each truck at the end of the most recent year follow: At the beginning of the year, a hydraulic lift is added to Truck 1 at a cost of 4,500. The addition of the hydraulic lift will allow the company to deliver much larger objects than could previously be delivered. At the beginning of the year, the engine of Truck 2 is overhauled at a cost of 5,000. The engine overhaul will extend the trucks useful life by three years. Write a short memo to Godwins chief financial officer explaining the financial statement effects of the expenditures associated with Trucks 1 and 2.
Exercise 10-2 (Static) Recording costs of assets LO C1 Cala Manufacturing purchases land for $390,000 as part of its plans to build a new plant. The company pays $33,500 to tear down an old building on the lot and $47,000 to fill and level the lot. It also pays construction costs of $1,452,200 for the new building and $87,800 for lighting and paving a parking area. Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash. View transaction list Journal entry worksheet A Record the total costs of the plant assets. Note: Enter debits before credits. Transaction General Journal Debit Credit
Exercise 9-02 Adama Company incurred the following costs.Indicate to which account Adama would debit each of the costs. 1. Sales tax on factory machinery purchased $5,000 Select the account to be debited BuildingPrepaid InsuranceLandEquipmentLand Improvements 2. Painting of and lettering on truck immediately upon purchase 700 Select the account to be debited LandBuildingEquipmentLand ImprovementsPrepaid Insurance 3. Installation and testing of factory machinery 2,000 Select the account to be debited BuildingLand ImprovementsPrepaid InsuranceLandEquipment 4. Real estate broker’s commission on land purchased 3,500 Select the account to be debited Land ImprovementsPrepaid InsuranceEquipmentBuildingLand 5. Insurance premium paid for first year’s insurance on new truck 880 Select the account to be debited Prepaid InsuranceEquipmentLand ImprovementsBuildingLand 6. Cost of landscaping on property purchased 7,200…
Brief Exercise 8-4 (Algo) Depreciation expense using the units-of-production method LO 8-4 Clean Air Company makes and sells cloth masks. The company purchased a new automated sewing machine at the beginning of Year 1 for $74,000. The machine is expected to have a two-year useful life and a $20,400 salvage value. The expected mask production is estimated at 107,200 masks. Actual print production for the two years was as follows: Year 1 Year 2 Total 59,000 52,000 111,000 Required: Compute the depreciation expense for each of the two years, using units-of-production depreciation. Depreciation expense Year 1 Year 2
QS 8-1 (Algo) Cost of plant assets LO C1 Kegler Bowling buys scorekeeping equipment with an invoice cost of $170,000. The electrical work required for the installation costs $17,850. Additional costs are $3,570 for delivery and $12,250 for sales tax. During the installation, the equipment was damaged and the cost of repair was $1,650 Required: Indicate whether each cost should be included in the cost of the equipment or excluded and expensed as incurred. Costs Invoice cost Electrical work required for installation Delivery costs Sales tax Repair costs Total recorded cost Amount $ 170,000 17,850 3,570 12,250 1,650 Included or Excluded Account
föllowing Cost Factor Site B 170,000$ Site A Price of land 100,000S Monthly cost of delivering materials S 10,000 $ 7,000 Cost of equipment setup $ 12,000 $ 9,000 Cost of utilities per month $ 1,500 1,100 For site A, an extra $ 60/ day is needed for additional site guards. a- Which site should the contractor select? b- When do the costs of two sites are equals (After how many months of work the costs are similar)?
Exercise 8-4A (Algo) Determining the cost of an asset LO 8-1 Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $120,090. The seller agreed to allow a 4.75 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transportation cost amounted to $2,500. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,100. The loader operator is paid an annual salary of $27,380. The cost of the company's theft insurance policy increased by $1,560 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,100. Required: Determine the amount to be capitalized in an asset account for the purchase of the front-end loader. Note: Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign. Costs that are to be capitalized: List price Total costs
Exercise 8-4A (Algo) Determining the cost of an asset LO 8-1 Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $120,090. The seller agreed to allow a 4.75 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transportation cost amounted to $2,500. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,100. The loader operator is paid an annual salary of $27,380. The cost of the company's theft insurance policy increased by $1,560 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,100. Required: Determine the amount to be capitalized in an asset account for the purchase of the front-end loader. Note: Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign. Mc Graw Hill Costs that are to be capitalized: List price Total costs $…