Dorman company purchased a new machine for its production process. The following costs were incurred for the new machine. Training costs for workers who will operate the machine $15,000 Wages paid to workers who operate the machine during production 109,000 Ordinary repairs to the machine before the first production run 1,000 1 Cost of platform used to properly secure the machine 30,000 Costs of tests run which took place before the first production run 8,000 WHICH COSTS SHOULD BE ADDED TO THE COST OF MACHINE?

Dorman company purchased a new machine for its production process. The following costs were incurred for the new machine. Training costs for workers who will operate the machine $15,000 Wages paid to workers who operate the machine during production 109,000 Ordinary repairs to the machine before the first production run 1,000 1 Cost of platform used to properly secure the machine 30,000 Costs of tests run which took place before the first production run 8,000 WHICH COSTS SHOULD BE ADDED TO THE COST OF MACHINE?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 46P

See similar textbooks

Similar questions

Maxtor Technology incurred the following costs during the year related to the creation of a new type of personal computer monitor: Salaries $220,000 Depreciation on R&D facilities and equipment Utilities and other direct costs incurred for the R&D facilities Patent filing and related legal costs Payment to another company for performing a portion of the development work Costs of adapting the new monitor for the specific needs of a 125,000 66,000 22,000 120,000 80,000 customer What amount should Maxtor report as research and development expense in its income statement?
Bonus Corporation is installing a new machine at its production facility. It has incurred these costs: Purchase price (including input tax of P300,000) P2,800,000 Initial delivery and handling costs 200,000 Costs of site preparation 600,000 Consultants used for advice on the acquisition of the machine 700,000 Installation and assembly costs 500,000 Costs of testing 100,000 Costs of training employees on how to use the machine 80,000 Estimated dismantling costs to be incurred after 7 years 300,000 Operating losses before commercial production 400,000 The cost of the machine is A. 4,900,000 B. 5,200,000 C. 4,200,000 D. 4,980,000
During the current year, Beta Company incurred the following costs related to a new solar-powered car: Salaries of laboratory employees researching how to build the new car 2,500,000 200,000 Legal fees for the patent application for the new car Engineering follow-up during the early stage of commerical production during the current year Marketing research to promote the new car Design, testing and construction of a prototype 500,000 300,000 4,000,000 What amount should be reported as research and development expense? a. 7,500,000 b. 6,500,000 C. 2,500,000 d. 7,200,000
Extra Corporation is installing a new machine at its production facility. It has incurred these costs: Purchase price (including input tax of P300,000) P2,800,000 Initial delivery and handling costs 200,000 Costs of site preparation 600,000 Consultants used for advice on the acquisition of the machine 700,000 Installation and assembly costs 500,000 Costs of testing 100,000 Costs of training employees on how to use the machine 80,000 Estimated dismantling costs to be incurred after 7 years 300,000 Operating losses before commercial production 400,000 The cost of the machine is Group of answer choices P5,200,000 P4,980,000 P4,900,000 P4,200,000
R Company made the following expenditures Initial design fee for proposed extension of office building 150.000 New condenser for central conditioning unit 10,000 Purchase of executive chairs and desks 200.000 Purchase storm windows and screens and their Installation on all office windows 500.000 80.000 Sealing of roof leaks in production area Replacement of door to production area Installation of automatic door opening 50,000 system 200 000 Overhead crane for assembly department to speed up production 350.000 Replacement of broken gear on machine 60.000 What total amount should be charged to repair and maintenance expense ?
Wolfe Assembly Masters developed a new cost- and time-efficient assembly process that would be advantageous to many manufacturing companies. To protect their process, they applied for and obtained a patent. Which of the following costs associated with the assembly process should Wolfe amortize as an intangible asset? $12,000 in disposal fees to remove hazardous waste collected during research and development $1.56 million in development costs to develop the process $37,000 to apply for a patent for the process $914,000 in research costs to learn about the process
JOOVI Inc. has recently purchased and installed a new machine for its manufacturingplant. Th e company incurred the following costs:Purchase price $12,980Freight and insurance $1,200Installation $700Testing $100Maintenance staff training costs $500Th e total cost of the machine to be shown on JOOVI’s balance sheet is closest to:A. $14,180.B. $14,980.C. $15,480.
A company purchased a special purpose machine on August 1st of the previous year. It was installed and ready to run on January 1st of the current year. The following costs were incurred in the purchase and installation of the machine: Invoice price $1,200,000 Freight costs 6,000 Installation costs 64,000 Electrical and power connections 32,000 Repairs to correct damage during uncrating 12,000 Costs to adjust machine to appropriate specifications 56,000 Costs of spare parts for future use 108,000 Sales tax 70,500 Cost of…
Rundle Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. Cost of materials (15,000 Units x $13) Labor (15,000 Units x $25) Depreciation on manufacturing equipment* Salary of supervisor of engine production Rental cost of equipment used to make engines $ 195,000 375,000 40,000 74,000 19,000 80,000 783,000 The equipment has a book value of $107,000 but its market value is zero. Allocated portion of corporate-level facility-sustaining costs Total cost to make 15,000 engines Required a. Determine the maximum price per unit that Rundle would be willing to pay for the engines. b. Determine the maximum price per unit that Rundle would be willing to pay for the engines, if production increased to 18,000 units. (For all requirements, Round your answers to 2 decimal places.) a. Maximum price per unit b. Maximum price per unit
Olivia Company was installing new equipment at its production facility and incurred the following costs: Cash price of the equipment, VAT inclusive of 12% 2,800,000 Initial delivery and handling cost 200,000 Cost of site preparation 600,000 Consultant used for advance on the acquisition of equipment 700,000 Interest charges paid to supplier for deferred credit 200,000 Estimated dismantling cost that may be incurred upon retirement 300,000 Operating losses before commercial production 400,000
Shantal Company is installing a new equipment and incurred the following costs: Cost of equipment per supplier’s invoice 2,500,000 Initial delivery and handling cost 200,000 Cost of site preparation 600,000 Consultants used for advance on the acquisition of equipment 700,000 Interest charged paid to supplier for deferred credit 200,000 Estimated dismantling cost to be incurred as required by contract 300,000 Operating losses before commercial production 400,000 Group of answer choices 4,300,000 4,000,000 4,200,000 4,500,000
On 1 June 20X1, Galaxy Co. purchased a new machine for use in its factory. The directors have capitalised the purchase price but are unsure how to treat the following related costs. 350,000 was spent on testing whether the machine was functioning properly. During the testing period (June — October 20X1), samples were produced and sold for a total of 75,000. 400,000 was also spent on training existing employees how to operate the new machine. The machine is being used to manufacture a new product, Product C and 1 million was spent on advertising this new product. Testing was completed and commercial production of Product C commenced on 31 October 20X1. Required: Advise Galaxy on how the above transactions should be dealt with in its financial statements for the year ended 31 December 20X1.