Whole Grain Bakery purchases an industrial bread machine for $27,000. In addition to the purchase price, the company makes the following expenditures: freight, $1,700; installation, $3,400; testing, $1,200; and property tax on the machine for the first year, $540 What is the initial cost of the bread machine? Total cost of the bread machine $

Whole Grain Bakery purchases an industrial bread machine for $27,000. In addition to the purchase price, the company makes the following expenditures: freight, $1,700; installation, $3,400; testing, $1,200; and property tax on the machine for the first year, $540 What is the initial cost of the bread machine? Total cost of the bread machine $

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 4RE: Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000...

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Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
Whole Grain Bakery purchases an industrial bread machine for $30,000. In addition to the purchase price, the company makes the following expenditures: freight, $2,000; installation, $4,000; testing, $1,500; and property tax on the machine for the first year, $600. What is the initial cost of the bread machine?
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On January 1, 2020, Button Inc. purchased the following two machines for use in its production process. Machine A: Electric Forklift Cash Price: $50,000 Other Expenditures included: Sales Tax $2,000 Shipping Costs Insurance During Shipping $250 $100 Installation and Testing Costs: $100 Oil and Lubricants to be used with the machinery during the first year of operations Button estimates that the useful life of the machine is 5 years with a $4,000 residual value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. $500 Machine B: Gas-Powered Wheelbarrow Recorded Cost: $115,000 Button estimates that the useful life of the machine is 5 years with a $10,000 residual value remaining at the end of that time period. Required: 1. For the electric forklift: а. What is the cost that Button should record for the purchase on January 1, 2020? b. What is the depreciation expense to be recorded in 2020? c. At the end of Year 3 (2022), Button…
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