Solar Industries purchased equipment for $150,000 and spent $30,000 on installation. Annual maintenance cost is $5,000. Calculate the capitalized cost:
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- In an energy systems installation, following financial requirement was identified. Capital cost of equipment and installation - $ 150,000 Recurrent cost of maintenance Replacement of parts Life time of the system Income through energy generation i. iii. -$5,000 per year -$4,000 per year - 12 years - $ 22,000 per year Calculate the payback period of the system. If the scarp value of the equipment is $ 5,000, determine is the net profit expected to be collected for the investment? Explain how this profit is affected by "cost of money" or "interest". No calculations needed.Lynda Inc. purchased a piece of equipment for $15,000. Additional costs include transportation, $300; installation, $700; test run, $1,000; and insurance from the date that the equipment begins productive output, $1,200. What is the capitalized amount of the equipment? $17,000 $18,200 $16,000 $15,000A company purchased new equipment for $40,000. The company paid cash for the equipment. Other costs associated with the equipment were: transportation costs, $2,300; sales tax paid, $2,400; and installation cost, $2,300. The total capitalized cost reported for the equipment was: Multiple Choice $44,700. $47,000. $40,000. $42,300.
- Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $229,500. Project 2 requires an initial investment of $156,000. Annual Amounts Project 1 Project 2 Sales of new product $ 148,000 $ 128,000 Expenses Materials, labor, and overhead (except depreciation) 77,000 44,000 Depreciation—Machinery 32,000 30,000 Selling, general, and administrative expenses 20,000 32,000 Income $ 19,000 $ 22,000 (a) Compute each project’s annual net cash flow.(b) Compute payback period for each investment.Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $268,000. Project 2 requires an initial investment of $170,000. Annual Amounts Sales of new product Expenses Project 1 Project 2 $ 180,000 $160,000 Materials, labor, and overhead (except depreciation) 85,000 52,000 Depreciation-Machinery 40,000 38,000 Selling, general, and administrative expenses 28,000 40,000 Income $27,000 $ 30,000 (a) Compute each project's annual net cash flow. (b) Compute payback period for each investment. Annual Amounts Income Sales of new product Project 1 Project 2 Cash Flow Income Cash Flow $180,000 $160,000 Expenses Materials, labor, and overhead (except depreciation) 85,000 52,000 Depreciation-Machinery 40,000 38,000 Selling, general, and administrative expenses 28,000 40,000 Income $27,000 $30,000 Net cash flow $0 Payback Period Numerator: / Denominator: Project 1 Project 2 = Payback period = 0 = 0Mortenson has purchased new equipment that initially costs$1,000,000. Setup costs are$100,000and delivery costs are$50,000. Calculate the year 3 MACRS depreciation of this equipment, which falls into the three-year asset class.
- Calculate the capitalized cost of an equipment maintained at a rate of 6% every year for $10,000, replaced every 3years for $25,000 at the same rate, and bought for $110,500.Nelson Company purchased equipment and incurred the following costs: Cash price = $55,000 Sales taxes = $4,400 Insurance during transit = $400 Site preparation, installation, and testing= $2,300What amount should be used as the cost basis of the equipment?A new engine was installed by a textile plant at a cost of 398,000 and projected to have a useful life of 14 years. At the end of the useful life, it is estimated to have a salvage value of 37,000. Determine the capitalized cost it the interest is 18% compounded semi-anually.
- A new engine was installed by a textile plant at cost of P and projected to have a useful life of 15 years. At the end of its useful life, it is estimated to have a salvage value of P31,000. The capitalized cost is P360,000. Determine the first cost P if interest is 15% compounded annually.HnH Solutions acquired a machine by making the following payments: Net cash price Rs. 116,000 including 16% Sales tax; Carriage in Rs. 6,000; Insurance in transit Rs. 5,000; Fire insurance for the next 4 years Rs. 8,000; Installation charges Rs. 20,000; Overhauling Charges (Before Use)Rs.2000; Charges to repair the damage caused during installation Rs. 2,000. REQUIRED: Classify the above payments into capital expenditures and revenue expenditures. Give and entry to record acquisition of machine, and another entry to record expenditures by Debiting General Expenses Account.Purchased land costs 2,500,000 and a Bank transfer is made. The cost of excavation of the old building and the base of the new building is 300,000 + %10VAT, the Property tax paid is 60,000 and Estate company invoice is 30,000+%10VAT is on the account. Please do necessary accounting enteries.
