Compute the total cost to be capitalized for each of these two pieces of equipment. Purchase equipment $enter a dollar amount Construction equipment $enter a dollar amount
Compute the total cost to be capitalized for each of these two pieces of equipment. Purchase equipment $enter a dollar amount Construction equipment $enter a dollar amount
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 5PA: Jada Company had the following transactions during the year: Purchased a machine for $500,000 using...
Related questions
Question
Bridgeport Co. both purchases and constructs various equipment it uses in its operations. The following items for two different types of equipment were recorded in random order during the calendar year 2020.
| Purchase | ||
|---|---|---|
|
Cash paid for equipment, including sales tax of $7,400
|
$155,400 | |
|
Freight and insurance cost while in transit
|
2,960 | |
|
Cost of moving equipment into place at factory
|
4,588 | |
|
Wage cost for technicians to test equipment
|
5,920 | |
|
Insurance premium paid during first year of operation on this equipment
|
2,220 | |
|
Special plumbing fixtures required for new equipment
|
11,840 | |
|
Repair cost incurred in first year of operations related to this equipment
|
1,924 | |
| Construction | ||
|
Material and purchased parts (gross cost $296,000; failed to take 2% cash discount)
|
$296,000 | |
|
Imputed interest on funds used during construction (stock financing)
|
20,720 | |
|
Labor costs
|
281,200 | |
|
Allocated overhead costs (fixed-$29,600; variable-$44,400)
|
74,000 | |
|
Profit on self-construction
|
44,400 | |
|
Cost of installing equipment
|
6,512 |
Compute the total cost to be capitalized for each of these two pieces of equipment.
|
Purchase equipment
|
$enter a dollar amount
|
|
|---|---|---|
|
Construction equipment
|
$enter a dollar amount
|
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
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.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning