R Company made the following expenditures Initial design fee for proposed extension of office building 150.000 New condenser for central conditioning unit 10,000 Purchase of executive chairs and desks 200.000 Purchase storm windows and screens and their Installation on all office windows 500.000 80.000 Sealing of roof leaks in production area Replacement of door to production area Installation of automatic door opening 50,000 system 200 000 Overhead crane for assembly department to speed up production 350.000 Replacement of broken gear on machine 60.000 What total amount should be charged to repair and maintenance expense ?

R Company made the following expenditures Initial design fee for proposed extension of office building 150.000 New condenser for central conditioning unit 10,000 Purchase of executive chairs and desks 200.000 Purchase storm windows and screens and their Installation on all office windows 500.000 80.000 Sealing of roof leaks in production area Replacement of door to production area Installation of automatic door opening 50,000 system 200 000 Overhead crane for assembly department to speed up production 350.000 Replacement of broken gear on machine 60.000 What total amount should be charged to repair and maintenance expense ?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 69APSA: A Cost of a Fixed Asset Mist City Car Wash purchased a new brushless car-washing machine for one of...

See similar textbooks

Similar questions

Rona Company provided the following charges to the “repair and maintenance account”. Service contract on office equipment 100,000 Initial design fee for proposed extension of office building 150,000 New condenser for central air conditioning unit 10,000 Purchase of executive chairs and desks 200,000 Purchase of storm windows and screens and their installation all office windows 500,000 Sealing of roof leaks in production area 80,000 Replacement of door to production area 50,000 Installation of automatic door-opening system 200,000 Overhead crane for assembly department to speed up production 350,000 Replacement of broken gear on machine , 60,000 what total amount of expenditure should be capitalized? a. 1,500,000 b.1,410,000 c 1,400,000 d. 1,200,000
Dorman company purchased a new machine for its production process. The following costs were incurred for the new machine. Training costs for workers who will operate the machine $15,000 Wages paid to workers who operate the machine during production 109,000 Ordinary repairs to the machine before the first production run 1,000 1 Cost of platform used to properly secure the machine 30,000 Costs of tests run which took place before the first production run 8,000 WHICH COSTS SHOULD BE ADDED TO THE COST OF MACHINE?
Sub Sandwiches of America made the following expenditures related to its restaurant: 1. Replaced the heating equipment at a cost of $250,000. 2. Covered the patio area with a clear plastic dome and enclosed it with glass for use during the winter months. The total cost of the project was $750,000. 3. Performed annual building maintenance at a cost of $24,000. 4. Paid for annual insurance for the facility at $8,800. 5. Built a new sign above the restaurant, putting the company name in bright neon lights, for $9,900. 6. Paved a gravel parking lot at a cost of $65,000. Required: Sub Sandwiches of America credits Cash for each of these expenditures. Indicate the account itdebits for each.
King Company made the following expenditures: Continuing and frequent repairs Repainted the plant building 400,000 100,000 300,000 140,000 Major improvements to the electrical wiring system Partial replacement of roof tiles What amount should be charged to repair and maintenance expense? a. 960,000 b. 820,000 c. 640,000 d. 540,000
Maxtor Technology incurred the following costs during the year related to the creation of a new type of personal computer monitor: Salaries $220,000 Depreciation on R&D facilities and equipment Utilities and other direct costs incurred for the R&D facilities Patent filing and related legal costs Payment to another company for performing a portion of the development work Costs of adapting the new monitor for the specific needs of a 125,000 66,000 22,000 120,000 80,000 customer What amount should Maxtor report as research and development expense in its income statement?
A company is planned to install new automated plastic molding press. Four different presses are available as follows: Press 1 Press 2 Press 3 Press 4 Capital Investment $24,000 $30,000 $49,000 $52,000 Useful Life (year) 5 5 5 5 Annual Expenses Power ($) Labor ($) Maintenance ($) Tax & Insurance ($) 2,720 26,400 1,600 480 2,720 24,000 1,800 608 4,800 16,800 2,600 992 4,800 14,800 2,000 1,040 Assume that each press has the same output capacity (120,000 units per year) and all units can be sold (the selling price is $0.375 per unit. Additional capital invested is expected to earn at least 10%. Which press should be chosen?
A Cost of a Fixed Asset Mist City Car Wash purchased a new brushless car-washing machine for one of its bays. The machine cost $41,700. Mist City borrowed the purchase price from its bank on a 1-year, 8% note payable. Mist City paid $975 to have the machine transported to its place of business and an additional $200 in shipping insurance. Mist City incurred the following costs as a part of the installation: During the testing process, one of the motors became defective when soap and water entered the motor because its cover had not been installed properly by Mist Citys employees. The motor was replaced at a cost of $640. Required: 1. Compute the cost of the car-washing machine. 2. CONCEPTUAL CONNECTION Explain why any costs were excluded from the cost of the machine.
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?
Foster has built a new factory incurring the following costs: $'000 Land 1,200 Materials 2,400 Labour 3,000 Architect's fees 25 Surveyor's fees 15 Site overheads 300 Apportioned administrative overheads 150 Testing of fire alarms 10 Business rates for first year 12 7,112 What will be the total amount capitalised in respect of the factory? A $6,112,000 B $6,950,000 C $7,112,000 D $7,100,000
During the current year, Beta Company incurred the following costs related to a new solar-powered car: Salaries of laboratory employees researching how to build the new car 2,500,000 200,000 Legal fees for the patent application for the new car Engineering follow-up during the early stage of commerical production during the current year Marketing research to promote the new car Design, testing and construction of a prototype 500,000 300,000 4,000,000 What amount should be reported as research and development expense? a. 7,500,000 b. 6,500,000 C. 2,500,000 d. 7,200,000
During the year just ended, Morton Company made the following expenditures relating to its plant building: Continuing and frequent repairs P1,600,000 Repainted the plant building 400,000 Major improvements to the electrical wiring system 1,280,000 Partial replacement of roof tiles 560,000 How much should be charged to repair and maintenance expense during the year just ended?
Martini Company incurred the following costs in purchasing a land as a factory site:Purchase price 2,400,000Cost of tearing down old building 240,000Legal fee for title investigation 15,000Title insurance 10,000 Architect fee 125,000Liability insurance during construction 25,000Excavation cost 40,000Payment to building contractor 8,800,000Special assessment by city for public improvement 30,000Interest cost during construction 300,000 What is the cost of the building?