An entity Installed an assembly line in 20X0. Four years later, 100,000 was invested to automate the line. The automation Increased the market value and productive capacity of the assembly line but did not affect Its useful life. Proper accounting for the cost of the automation should be to

An entity Installed an assembly line in 20X0. Four years later, 100,000 was invested to automate the line. The automation Increased the market value and productive capacity of the assembly line but did not affect Its useful life. Proper accounting for the cost of the automation should be to

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Maribeth Company made the following expenditures relating to Product Zee: Legal costs to file a patent on Product Zee. Production of the finished product would not have been undertaken without the patent 100,000 Special equipment to be used solely for development of Product Zee. The special equipment has no other use and has an estimated useful life of four years Labor and materials costs incurred in producing a prototype model Cost of testing the prototype What total amount of costs should be expensed when incurred? A. 2,800,000 600,000 2,000,000 800,000 В. 2,950,000 С. 3,400,000 D. 3,500,000
Hi please give me instruction on this question cant figure out.. Differential Analysis for Machine Replacement Taipei Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $77,400, the accumulated depreciation is $31,000, its remaining useful life is five years, and its residual value is negligible. On September 27, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that will cost $161,000. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations: Present Operations Proposed Operations Sales $245,400 $245,400 Direct materials 83,600 83,600 Direct labor 58,100 — Power and maintenance 5,400 28,600 Taxes, insurance, etc. 1,900 6,400…
SK Ltd has acquired a new machine which it has had installed in its factory. Assess which of the following items should be capitalised into the cost of the Machine. Provide a reason for your conclusions in detail as per IAS 16 measurement recognition. Labour and travel costs for managers to inspect possible new machines and for negotiating for a new machine Freight costs and insurance to get the new machine to the factory Costs for renovating a section of the factory, in anticipation of the new machine’s arrival, to ensure that all the other parts of the factory will have easy access to the new machine Cost of cooling equipment to assist in the efficient operation of the new machine Costs of repairing the factory door, which was damaged by the installation of the new machine Training costs of workers who will use the machine
8. Maribeth Company made the following expenditures relating to Product Zee: Legal costs to file a patent on Product Zee. Production of the finished product would not have been undertaken without the patent 100,000 Special equipment to be used solely for development of Product Zee. The special equipment has no other use and has an estimated useful life of four years Labor and materials costs incurred in producing a prototype model Cost of testing the prototype What total amount of costs should be expensed when incurred? А. 2,800,000 600,000 2,000,000 800,000 В. 2,950,000 С. 3,400,000 D. 3,500,000
Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they have the costs shown in the following table: He is told to assume that: Original Cost Labor per year Maintenance per year Salvage value Machine A $15,000 $2,400 $4,300 $2,000 Machine B $24,000 $4,000 $800 $7,500 1. The life of each machine is 3 years. 2. The company thinks it knows how to make 14% on investments no more risky than this one. 3. Labor and maintenance are paid at the end of the year. The NPV for Machine A = $ (round your response to the nearest whole number and include a minus sign if necessary).
Rebe is looking over two sets of calculations done by a new employee. Set A presents the original cost of a vehicle to be $60,000 and the depreciable cost to be $30,000. Set B presents the depreciable cost of a machine to be $100,000 and the original cost of the machine to be $80,000. Are these calculations correct? No, Set A is incorrect as the depreciable cost cannot possibly be lower than the original cost of the asset. Yes, both Set A and Set B are likely correct, but to know for sure the salvage value of the assets would also need to be known. Yes, both Set A and Set B are likely correct, but to know for sure the estimated useful life would also need to be known. O No, Set B is incorrect as the depreciable cost cannot possibly be higher than the original cost of the asset.
Outspoken Company made the following expenditures relating to Product Y. Legal costs to file a patent on Product Y. Production of the finished product would not have been undertaken without the patent Special equipment to be used solely for development of Product Y. The equipment has no other use and has an estimated useful life of four years. Labor and material costs incurred in producing a prototype Cost of testing the prototype - 100,000 600,000 2,000,000 800,000 What total amount should be expensed when incurred? a. 2,800,000 b. 2,950,000 c. 3,400,000 d. 3,500,000
A financial analyst for zzz corporation is evaluating the cost of an investment in required pollution controlled equipment.. The npv was -5746639. When this is converted to its equivalent annual cost a value of-1,000,000 was found. Given this, what is the cost of capital and number of years were assigned to cover the npv to eac.
In trying to decide whether or not to replace a sorting/baling machine in a solid waste recycling operation, an engineer calculated the annual worthvalues for the in-place machine and a challenger. On the basis of these costs, the defender should be replaced:a. now.b. 1 year from now.c. 2 years from now.d. 3 years from now.
Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they have the costs shown in the following table: Machine A Machine B Original Cost $15,000 $24,000 Labor per year $2,400 $4,000 Maintenance per year $4,300 $800 Salvage value $2,000 $7,500 He is told to assume that: 1. The life of each machine is 3 years. 2. The company thinks it knows how to make 14% on investments no more risky than this one. 3. Labor and maintenance are paid at the end of the year. The NPV for Machine B= $._____enter your response here
PLEASE SOLVE THIS TWO PROBLEMS ASAP. THANK YOU! A. A machine costs P388868 with a salvage value of P18029 is expected to last for 28537 hours in 5 years. In the first year of service it was used for 8077 hours. Compute the book value at the end of the first year. B.The cost of a certain asset is P486042 , its life is 5 years and scrap value is P9050 . Find the cost of depreciation after the first year using a constant percentage method.
Warrick Water Company, a privately owned business, supplies water to several communities. Warrick has just performed an extensive overhaul on one of its water pumps. The overhaul is expected to extend the life of the pump by 10 years. The residual value of the pump is unchanged. You have been asked to determine which of the following costs should be capitalized as a part of this overhaul. Those costs not capitalized should be expensed. Required: Conceptual Connection: Classify each cost as part of the overhaul or as an expense. New pump motor Repacking of bearings (performed monthly) New impeller (rotating component of a pump) Painting of pump housing (performed annually) Replacement of pump foundation New wiring (needed every 5 years) Installation labor, motor Installation labor, impeller Installation labor, wiring Paint labor (performed annually) Placement of fence around pump* ČA requirement of the Occupational Safety and Health Administration that will add to maintenance costs over…