Shipping costs (paid by 500 Plummer) 1,000 500 Renovation costs prior to use 2,500 1,000 1,500 By the end of the first year, each machine had been operating 4,800 hours. Prepare the entry to record depreciation expense at the end of Year 1, assuming the fo ote: Do not round intermediate calculations. If no entry is required for a transaction/e quired" in the first account field. ESTIMATES Residual achine Life Value Depreciation Method A 5 years $1,000 Straight-line 60,000 Units-of- B 2,000 hours production ப C 4 years 1,500 Double-declining-

Shipping costs (paid by 500 Plummer) 1,000 500 Renovation costs prior to use 2,500 1,000 1,500 By the end of the first year, each machine had been operating 4,800 hours. Prepare the entry to record depreciation expense at the end of Year 1, assuming the fo ote: Do not round intermediate calculations. If no entry is required for a transaction/e quired" in the first account field. ESTIMATES Residual achine Life Value Depreciation Method A 5 years $1,000 Straight-line 60,000 Units-of- B 2,000 hours production ப C 4 years 1,500 Double-declining-

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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Required information [The following information applies to the questions displayed below.] At the beginning of the year, Plummer's Sports Center bought three used fitness machines from Primo Fitness, an established supplier of used, new and refurbished gym equipment in Southern California. The machines immediately were overhauled and started operating. The machines were different; therefore, each had to be recorded separately in the accounts. Invoice price paid for asset Shipping costs (paid by Plummer) Renovation costs prior to use By the end of the first year, each machine had been operating 5,200 hours. Machine A B C 2. Prepare the entry to record depreciation expense at the end of Year 1, assuming the following. Note: Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No 1 ESTIMATES Life 6 years 61,000 hours 9 years Transaction a Residual Value Machine A Machine B Machine C $20,300…
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Required information [The following information applies to the questions displayed below.] At the beginning of the year, Almond Factory bought three used machines. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Details for Machine A are provided below. Cost of the asset Installation costs Renovation costs prior to use Repairs after production began $10,400 940 1,020 790 Prepare the journal entry to record year 2 units-of-production depreciation expense for Machine B, assuming a capitalized cost of $47,880, an estimated life of 30,000 hours, $4,500 residual value, and actual year 2 use of 8,000 hours. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Record the year 2 depreciation expense for Machine B.
! Required information [The following information applies to the questions displayed below.] At the beginning of the year, Almond Factory bought three used machines. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Details for Machine A are provided below. Cost of the asset Installation costs Renovation costs prior to use Repairs after production began $10,400 940 1,020 790 7. Prepare the journal entry to record year 2 double-declining balance depreciation expense for Machine C, which has a cost of $26,800, an estimated life of 10 years, and $1,400 residual value. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) A. Record the year 2 depreciation expense for Machine C.
! Required information [The following information applies to the questions displayed below.] At the beginning of the year, Almond Factory bought three used machines. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Details for Machine A are provided below. Cost of the asset Installation costs Renovation costs prior to use Repairs after production began $10,400 940 1,020 790 Prepare the journal entry to record year 2 straight-line depreciation expense for Machine A, assuming an estimated life of 4 years and $1,000 residual value. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Chilton Peripherals manufactures printers, scanners, and other computer peripheral equipment. In the past, thecompany purchased equipment used in manufacturing from an outside vendor. In March 2018, Chilton decidedto design and build equipment to replace some obsolete equipment. A section of the manufacturing plant was setaside to develop and produce the equipment. Additional personnel were hired for the project. The equipment wascompleted and ready for use in September.Required:1. In general, what costs should be capitalized for a self-constructed asset?2. Discuss two alternatives for the inclusion of overhead costs in the cost of the equipment constructed by Chilton. Which alternative is generally accepted for financial reporting purposes?3. Under what circumstance(s) would interest be included in the cost of the equipment?
[The following information applies to the questions displayed below.] At the beginning of the year, Algernon Companies bought three used machines. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Details for Machine A are provided below. Cost of the asset $10,800 Installation costs 980 Renovation costs prior to use 1,140 Repairs after production began 870 3. Prepare the journal entry to record year 2 straight-line depreciation expense for Machine A, assuming an estimated life of 4 years and $1,000 residual value.
Required information [The following information applies to the questions displayed below.) At the beginning of the year, Cruz & Turner Corporation bought three used machines. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Details for Machine A are provided below. Cost of the asset Installation costs Renovation costs prior to use Repairs after production began $10,700 970 1,110 850 Required: 1. Compute the amount to be capitalized for Machine A Total cost U
Manny Company uses many kinds of machines in its operations. The following information relates to a machine that was acquired at the beginning of the current year: Cash paid for machine, including VAT of P96,000 Cost of transporting machine Labor cost of installation by expert fitter Labor cost of testing machine Insurance cost for the current year Cost of training for personnel who will use the machine Cost of safety rails and platform surrounding machine Cost of water device to keep machine cool Cost of adjustment to machine to make it operate more efficiently Estimated dismantling cost to be incurred as required by contract 896,000 30,000 50,000 40,000 15,000 25,000 60,000 80,000 75,000 65,000 What total amount should be capitalized as cost of the machine?
At the beginning of the year, CCZ Corporation bought three used machines from Pequita Compression Incorporated. The machines immediately were overhauled, installed, and started operating. Because the machines were different from each other, each was recorded separately in the accounts. Machine A Machine B Machine C Cost of the asset $ 10,040 $ 28,340 $ 22,200 Installation costs 1,620 2,120 820 Renovation costs prior to use 620 1,420 1,620 Repairs after production began 520 420 720 By the end of the first year, each machine had been operating 7,200 hours. Required:1-a. Compute the cost of each machine. 1-b. Which of the following should be capitalized? (Select all that apply.) 2. Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)…
CH Kilo Inc. is evaluating a proposal to supply warehouse space to a potential customer as well as maintain all the required warehouse records. Kilo has a storage barn not currently in use; however, it will require the installation of additional shelving and a special concrete pad for delivery truck access Kilo's existing accountant will assume the additional accounting duties and receive an additional $8,000 per annum. The potential customer will pay a fee to Kilo based on the volume of product stored. Required: Which of the following items is not a relevant consideration in deciding whether Kilo should provide the warehouse space to the potential customer? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer, Any boxes left with a question mark will be automatically graded as incorrect.) Original purchase price of the storegeben…
At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Machine A Machine B Machine C Cost of the asset $ 10,800 $ 40,000 $ 23,800 Installation costs 950 3,900 3,000 Renovation costs prior to use 750 3,500 4,000 Repairs after production began 700 900 2,500 By the end of the first year, each machine had been operating 8,000 hours. Required: Compute the cost of each machine. Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following: Estimates Machine Life Residual Value Depreciation Method A 5 years $ 2,800 Straight-line B 20,000 hours 2,400 Units-of-production C 10 years 1,600 Double-declining-balance