College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 25, Problem 4SEA
ALLOCATING OPERATING EXPENSE—MILES DRIVEN Mercado Lopez owns a furniture store that offers free delivery of merchandise delivered within the local area.
Mileage records for the three sales departments are as follows:
The cost of using the truck for the last year, including depreciation, was $16,000.
Allocate the cost of the truck among the three departments on the basis of miles driven.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Xpress Delivery Service completed the following transactions and events involving the purchase and operation of equipment for its business.
20X0
Jan. 1 Paid $24,950 cash plus $1,950 in sales tax for a new delivery van that was estimated to have a five-year life and a $3,400 salvage value. Van costs are recorded in the Equipment account.
Jan. 3 Paid $1,550 to install sorting racks in the van for more accurate and quicker delivery of packages. This increases the estimated salvage value of the van by another $200.
Dec. 31 Recorded annual straight-line depreciation on the van.
20X1
Jan. 1 Paid $1,970 to overhaul the van’s engine, which increased the van’s estimated useful life by two years.
May 10 Paid $600 to repair the van after the driver backed it into a loading dock.
Dec. 31 Record annual straight-line depreciation on the van. (Round to the nearest dollar.)
Required
Prepare journal entries to record these transactions and events.
Wildhorse Co. incurs these expenditures in purchasing a truck: cash price $24,300, accident
insurance (during use) $2,500, sales taxes $1,22O, motor vehicle license $510, and painting
and lettering $1,850.
What is the cost of the truck?
The cost of the truck
%24
Crane Company incurs these expenditures in purchasing a truck: cash price $22,480, accident insurance (during use) $1,570, sales taxes $1,690, motor vehicle license $590, and painting and lettering $2,460.What is the cost of the truck?
The cost of the truck
$Enter a dollar amount
Chapter 25 Solutions
College Accounting, Chapters 1-27
Ch. 25 - A department that incurs costs and generates...Ch. 25 - Departmental gross profit is the difference...Ch. 25 - Prob. 3TFCh. 25 - Direct expenses are operating expenses incurred...Ch. 25 - Departmental direct operating margin is the...Ch. 25 - A department that incurs costs but does not...Ch. 25 - The difference between a departments net sales and...Ch. 25 - Prob. 3MCCh. 25 - The difference between a departments gross profit...Ch. 25 - The difference between a departments gross profit...
Ch. 25 - Prob. 1CECh. 25 - Prob. 2CECh. 25 - Prob. 3CECh. 25 - Prob. 1RQCh. 25 - Prob. 2RQCh. 25 - Prob. 3RQCh. 25 - Prob. 4RQCh. 25 - Prob. 5RQCh. 25 - Prob. 6RQCh. 25 - Prob. 7RQCh. 25 - Prob. 8RQCh. 25 - Distinguish between departmental gross profit,...Ch. 25 - Prob. 10RQCh. 25 - GROSS PROFIT SECTION OF DE PART MENT AL INCO ME ST...Ch. 25 - ALLOCATING OPERATING EXPENSESQUARE FEET Weaverling...Ch. 25 - ALLOCATING OPERATING EXPENSERELATIVE NET SALES...Ch. 25 - ALLOCATING OPERATING EXPENSEMILES DRIVEN Mercado...Ch. 25 - COMPUTING OPERATING INCOME The sales, cost of...Ch. 25 - Prob. 6SEACh. 25 - INCOME STATEMENT WITH DEPART MENTAL GROSS PROFIT...Ch. 25 - INCOME STATE MENT WITH DEPARTMENTAL OPERATING...Ch. 25 - INCOME STATEMENT WITH DEPART MENTAL DIRECT...Ch. 25 - Prob. 10SPACh. 25 - GROSS PROFIT SECTION OF DEPART MENTAL INCOME...Ch. 25 - Prob. 2SEBCh. 25 - ALLOCATING OPERATING EXPENSERELATIVE NET SALES...Ch. 25 - ALLOCATING OPERATING EXPENSEMILES DRIVEN Herbert...Ch. 25 - Prob. 5SEBCh. 25 - Prob. 6SEBCh. 25 - INCOME STATEMENT WITH DEPART MENTAL GROSS PROFIT...Ch. 25 - Prob. 8SPBCh. 25 - Prob. 9SPBCh. 25 - Prob. 10SPBCh. 25 - Prob. 1MYWCh. 25 - Prob. 1ECCh. 25 - MASTERY PROBLEM Bobs Acme Supermarket has been in...Ch. 25 - CHALLENGE PROBLEM This problem challenges you to...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- ALLOCATING OPERATING EXPENSEMILES DRIVEN Herbert Quiong owns a furniture store that offers free delivery of merchandise delivered within the local area. Mileage records for the three sales departments are as follows: The cost of using the truck for the last year, including depreciation, was 5,000. Allocate the cost of the truck among the three departments on the basis of miles driven.arrow_forwardA company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950arrow_forwardBlossom Company incurs these expenditures in purchasing a truck: cash price $20,000, accident insurance (during use) $1,500, sales taxes $1,100, motor vehicle license $200, and painting and lettering $1,600.What is the cost of the truck? The cost of the truck $Enter a dollar amountarrow_forward
- With the following transactions, determine the Cost of Good Sold for a Manufacturing plant. 1. A $7000 loan was obtained and deposited in cash. 2. Another loan was obtained for the purchase of new equipment for the amount of 5539 with 5 years of life. 3. The equipment is depreciated for the first year. 4. Direct Labor is paid for the amount of 322. 5. Packaging employees are paid for 997. 6. 200 materials were invoiced at 2 each for the inventory. 7. 150 materials were used in production. 8. The 150 units were sold at $4.00 each and they are invoiced. 9. Sales and distribution expenses for $1000 were paid.arrow_forwardQuestions # 24-27 are based on the information below: Chubbyville purchases a delivery van for $23,500. Chubbyville estimates a four-year service life and a residual value of $2,500. During the four-year period, the company expects to drive the van 105,000 miles. Actual miles driven were 24,000 miles in Year 1 and 26,000 miles in Year 2. 24. Using the straight-line method, what is the depreciation expense for year 2? A. $5,250 B. $5,875 C. $10,500 D. $11,750 25. Using the straight-line method, what is the book value at the end of year 3? A. $9,750 B. $10,550 C. $7,750 D. $8,250 26. Using double-declining balance method, what is the depreciation expense for year 1? A. $5,250 B. $5,875 C. $11,250 D. $11,750 27. Using the activity-based method, what is the balance in accumulated depreciation at the end of year 2? A. $10,000 B. $4,800 C. $5,200 D. $13,500arrow_forwardWestern Wholesale Foods incurs the following expenditures during the current fiscal year. Required: How should Western account for each of these expenditures? 1. Salaries for the repair technicians, $147,000 2. Remodeling of the executive offices, $81,600 3. Annual maintenance costs related to its machinery, $73,400 4. Improvement of the production line resulting in an increase in productivity, $31,000 5. Addition of a sprinkler system to the manufacturing facility to reduce the risk of fire damage, $44,700arrow_forward
- On August 1, 20x1, ABC Co. received a P1,800,000 grant from the government to aid in ABC Co.’s clean-up drive in a nearby creek. The cleanup took ABC Co. 6 months to complete from September 1, 20x1 to March 1, 20x2. The clean-up costs totaled P2,700,000 and were incurred evenly. If ABC Co. uses the gross presentation, how much is the income from the government grant in 20x1? How much is the balance of the deferred income from the government grant on December 31, 20x1? If ABC Co. uses the net presentation, how much is the cost of the cleanup recognized as an expense in 20x1? On July 1, 20x1, a flood-damaged one of ABC’s buildings. The building has a carrying amount of P24,000,000 before the flood. Because of the damages, the building is now assessed to have a recoverable amount of only P9,000,000 and a reduced remaining useful life of 4 years. To aid in the loss, the government granted ABC Co. P200,000 cash. How much is the income from government grants in 20x1?arrow_forwardAdama Company incurred the following costs.Indicate to which account Adama would debit each of the costs. 1. Sales tax on factory machinery purchased $5,000 Select an account to be debited 2. Painting of and lettering on truck immediately upon purchase 700 Select an account to be debited 3. Installation and testing of factory machinery 2,000 Select an account to be debited 4. Real estate broker’s commission on land purchased 3,500 Select an account to be debited 5. Insurance premium paid for first year’s insurance on new truck 880 Select an account to be debited 6. Cost of landscaping on property purchased 7,200 Select an account to be…arrow_forwardFrom April 1 through October 31, Will County Highway Department hires temporary employees to mow and clean the right-of-way along county roads. The County Road Commissioner has asked you to help her in determining the variable labor cost of mowing and cleaning a mile of road. The following information is available regarding current-year operations: Month April May June July August September October Miles Mowed Labor Costs and Cleaned 350 $4,000 300 3,750 400 4,500 250 2,750 375 4,250 200 2,500 100 2,400 Use the information from the high- and low-volume months to develop a cost-estimating equation for monthly labor costs. Monthly labor costs = $ 1700 + $ 7 X Plot the data on a scatter diagram. Using the information from representative high- and low volume months, use the high-low method to develop a cost- estimating equation for monthly labor costs. Monthly labor costs = $ $ X Adjust the equation developed in requirement (b) to incorporate the effect of an anticipated 7 percent increase…arrow_forward
- Wildhorse Company purchased a delivery truck. The total cash payment was $36,270, including the following items. Negotiated purchase price Installation of special shelving Painting and lettering Motor vehicle license Annual insurance policy Sales tax Total paid $31,200 1,430 1,170 130 650 1,690 $36,270 Calculate the cost of the truck and the operating costs of the truck.arrow_forwardOn August 1, 20x1, ABC Co. received 1,800,000 grant from the government to aid in ABC Co.’s clean-up drive in a nearby creek. The clean up took ABC Co. 6 months to complete from September 1, 20x1 to March 1, 20x2. The clean up costs totaled 2,700,000 and were incurred evenly. If ABC Co. uses the gross presentation, how much is the income from the government grant in 20x1? How much is the balance of the deferred income from government grant on December 31, 20x1? If ABC Co. uses the net presentation, how much is the cost of the clean up recognized as expense in 20x1? On July 1, 20x1, a flood damaged one of ABC’s buildings. The building has a carrying amount of 2,400,000 before the flood. Because of the damages, the building is now assessed to have a recoverable amount of only 9,000,000 and a reduced remaining useful life of 4 years. To aid in the loss, the government granted ABC Co. 200,000 cash. How much is the income from government grant in 20x1?arrow_forwardWestern Wholesale Foods incurs the following expenditures during the current fiscal year. How should Western account for each of these expenditures? 1. Salaries for the repair technicians, $145,000 2. Remodeling of the executive offices, $85,900 3. Annual maintenance costs related to its machinery, $75,500 4. Improvement of the production line resulting in an increase in productivity, $39,200 5. Addition of a sprinkler system to the manufacturing facility to reduce the risk of fire damage, $43,400arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Fixed Asset Replacement Decision 1235; Author: Accounting Instruction, Help, & How To;https://www.youtube.com/watch?v=LJRzn9K8Nwk;License: Standard Youtube License