FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- 7) Crass Spray Inc. (CSI) purchased equipment costing $60,000 on September 1, 2023. CSI made a $20,000 down payment and took out a loan for the remaining amount. Other cash expenditures related to this purchase included: Insurance during shipping: $500 Annual insurance policy: $2,400 Installation and testing costs: $600 Staff training costs on how to run the new equipment: $700 Required Determine the cost of the new equipment and record all required journal entries related to this equipment (you can ignore depreciation expense for the year).arrow_forwardOn January 1, 2020, Sunland Company purchased land for an office site by paying $2680000 cash. Sunland began construction on the office building on January 1. The following expenditures were incurred for construction: Date Expenditures January 1, 2020 $ 1780000 April 1, 2020 2530000 May 1, 2020 4490000 June 1, 2020 4720000 The office was completed and ready for occupancy on July 1. To help pay for construction, and purchase of land $3650000 was borrowed on January 1, 2020 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2020 was a $1400000, 12%, 6-year note payable dated January 1, 2020. Assume the weighted-average accumulated expenditures for the construction project are $4300000. The amount of interest cost to be capitalized during 2020 is $441750. $387000. $496500. $406500...arrow_forwardOriole Corp., a public company located in Manitoba, both purchases and constructs various pieces of machinery and equipment that it uses in its operations. The following items are for machinery that was purchased and a piece of equipment that was constructed during the 2020 fiscal year: Machinery Cash paid for machinery, including sales tax of $10,150 and recoverable GST of $7,250 $162,400 Freight and insurance cost while in transit 2,820 Cost of moving machinery into place at factory 3,200 Wage cost for technicians to test machinery 3,900 Materials cost for testing 500 Insurance premium paid on the machinery for its first year of operation 1,900 Special plumbing fixtures required for new machinery 8,050 Repair cost on machinery incurred in first year of operations 1,000 Cash received from provincial government as incentive to purchase machinery 26,300 Equipment (Self-Constructed) Material and purchased parts (gross cost $190,000; failed to take 1% cash discount; the company uses the…arrow_forward
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