4th Edition

ISBN: 9781337690881

Author: Jay Rich, Jeff Jones

Publisher: Cengage Learning

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Textbook Question

Chapter 7, Problem 69APSA

A Cost of a Fixed Asset

Mist City Car Wash purchased a new brushless car-washing machine for one of its bays. The machine cost $41,700. Mist City borrowed the purchase price from its bank on a 1-year, 8% note payable. Mist City paid $975 to have the machine transported to its place of business and an additional $200 in shipping insurance. Mist City incurred the following costs as a part of the installation:

Chapter 7, Problem 69APSA, A Cost of a Fixed Asset Mist City Car Wash purchased a new brushless car-washing machine for one of

During the testing process, one of the motors became defective when soap and water entered the motor because its cover had not been installed properly by Mist City’s employees. The motor was replaced at a cost of $640.

Required:

1. Compute the cost of the car-washing machine.

2. CONCEPTUAL CONNECTION Explain why any costs were excluded from the cost of the machine.

Expert Solution & Answer

Chapter 7 Solutions

Cornerstones of Financial Accounting

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Ch. 7 - Prob. 11DQ Ch. 7 - Prob. 12DQ Ch. 7 - Prob. 13DQ Ch. 7 - Prob. 14DQ Ch. 7 - Prob. 15DQ Ch. 7 - Prob. 16DQ Ch. 7 - Prob. 17DQ Ch. 7 - Prob. 18DQ Ch. 7 - Prob. 1MCQ Ch. 7 - Prob. 2MCQ Ch. 7 - When depreciation is recorded each period, what...Ch. 7 - Prob. 4MCQ Ch. 7 - Refer to the information for Cox Inc. above. What...Ch. 7 - Refer to the information for Cox Inc. above. What...Ch. 7 - Which of the following statements is true...Ch. 7 - Normal repair and maintenance of an asset is an...Ch. 7 - Chapman Inc. purchased a piece of equipment in...Ch. 7 - Bradley Company purchased a machine for $34,000 on...Ch. 7 - Prob. 11MCQ Ch. 7 - Which of the following statements is true? a. The...Ch. 7 - Prob. 13MCQ Ch. 7 - Heston Company acquired a patent on January 1,...Ch. 7 - Prob. 15MCQ Ch. 7 - ( Appendix 7 A) Murnane Company purchased a...Ch. 7 - Prob. 17CE Ch. 7 - Prob. 18CE Ch. 7 - Straight-Line Depreciation Refer to the...Ch. 7 - Prob. 20CE Ch. 7 - Prob. 21CE Ch. 7 - Revision of Depreciation On January 1, 2017, Slade...Ch. 7 - Disposal of an Operating Asset On August 30,...Ch. 7 - Prob. 24CE Ch. 7 - Cost of Intangible Assets Advanced Technological...Ch. 7 - Prob. 26CE Ch. 7 - Prob. 27CE Ch. 7 - (Appendix 7A) Impairment Brown Industries had two...Ch. 7 - Prob. 29BE Ch. 7 - Acquisition Cost Desert State University installed...Ch. 7 - Depreciation Concepts Listed below are concepts...Ch. 7 - Depreciation Methods On January 1, 2019, Loeffler...Ch. 7 - Expenditures After Acquisition Listed below are...Ch. 7 - Revision of Depreciation On January 1, 2019, the...Ch. 7 - Disposal of an Operating Asset Jolie Company owns...Ch. 7 - Analyzing Fixed Assets Pitt reported the following...Ch. 7 - Prob. 37BE Ch. 7 - Prob. 38BE Ch. 7 - ( Appendix 7A) Impairment Listed below is...Ch. 7 - Prob. 40E Ch. 7 - Prob. 41E Ch. 7 - Prob. 42E Ch. 7 - Prob. 43E Ch. 7 - Cost of a Fixed Asset Colson Photography Service...Ch. 7 - Prob. 45E Ch. 7 - Cost and Depreciation On January 1, 2019, Quick...Ch. 7 - Characteristics of Depreciation Methods Below is a...Ch. 7 - Prob. 48E Ch. 7 - Depreciation Methods Clearcopy, a printing...Ch. 7 - Depreciation Methods Quick-as-Lightning, a...Ch. 7 - Inferring Original Cost Barton Construction...Ch. 7 - Choice Among Depreciation Methods Walnut Ridge...Ch. 7 - Revision of Depreciation On January 1, 2017,...Ch. 7 - Capital versus Revenue Expenditure Warrick Water...Ch. 7 - Expenditures After Acquisition The following...Ch. 7 - Expenditures After Acquisition Roanoke...Ch. 7 - Prob. 57E Ch. 7 - Prob. 58E Ch. 7 - Disposal of Fixed Asset Pacifica Manufacturing...Ch. 7 - Prob. 60E Ch. 7 - Prob. 61E Ch. 7 - Prob. 62E Ch. 7 - Balance Sheet Presentation The following...Ch. 7 - Prob. 64E Ch. 7 - Prob. 65E Ch. 7 - Prob. 66E Ch. 7 - Prob. 67E Ch. 7 - Financial Statement Presentation of Operating...Ch. 7 - A Cost of a Fixed Asset Mist City Car Wash...Ch. 7 - Depreciation Methods Hansen Supermarkets purchased...Ch. 7 - Depreciation Schedules Wendt Corporation acquired...Ch. 7 - Expenditures After Acquisition Pasta, a restaurant...Ch. 7 - Prob. 73APSA Ch. 7 - Prob. 74APSA Ch. 7 - Prob. 75APSA Ch. 7 - Prob. 76APSA Ch. 7 - Prob. 68BPSB Ch. 7 - Cost of a Fixed Asset Metropolis Country Club...Ch. 7 - Depreciation Methods Graphic Design Inc. purchased...Ch. 7 - Depreciation Schedules Dunn Corporation acquired a...Ch. 7 - Prob. 72BPSB Ch. 7 - Prob. 73BPSB Ch. 7 - Prob. 74BPSB Ch. 7 - Prob. 75BPSB Ch. 7 - Prob. 76BPSB Ch. 7 - Prob. 77.1C Ch. 7 - Prob. 77.2C Ch. 7 - Prob. 78.1C Ch. 7 - Prob. 78.2C Ch. 7 - Prob. 79.1C Ch. 7 - Prob. 79.2C Ch. 7 - Prob. 79.3C Ch. 7 - Prob. 80.1C Ch. 7 - Prob. 80.2C Ch. 7 - Prob. 80.3C Ch. 7 - Prob. 80.4C Ch. 7 - Prob. 80.5C Ch. 7 - Prob. 80.6C Ch. 7 - Prob. 80.7C Ch. 7 - Prob. 80.8C Ch. 7 - Comparative Analysis: Under Armour, Inc., versus...Ch. 7 - Prob. 81.2C Ch. 7 - Comparative Analysis: Under Armour, Inc., versus...Ch. 7 - CONTINUING PROBLEM: FRONT ROW ENTERTAINMENT After...Ch. 7 - CONTINUING PROBLEM: FRONT ROW ENTERTAINMENT After...Ch. 7 - CONTINUING PROBLEM: FRONT ROW ENTERTAINMENT After...Ch. 7 - CONTINUING PROBLEM: FRONT ROW ENTERTAINMENT After...

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Solution Summary: The author explains that fixed asset must be recorded at the exchange price when the asset is purchased. The total cost of the car washing machine is 46,820.

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Chapter 7 Solutions