Exchanged a display case put in service on 1 April, 2 years prior (original cost $21000, $0 salvage value) fora new display case, list price $25000; terms FOB, destination. The trade-in allowance was $18000 and thebalance due of $7000 was paid in cash. Freight costs are $65 and insurance in transit was $45. Displaycases are classified as Store and Office Equipment. The estimated useful life of both old and new cases is10 years. Record this transaction in the GJ. Hint: the cost of the new equipment is $25000.

In the transaction involving the exchange of an old display case for a new one, the company records…

Answered: Exchanged a display case put in service…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles

Section: Chapter Questions

Problem 8.1E

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The following information pertains to the January 2, year 2 transaction replacing a print machine for Hidden Creek Enterprises, Inc.Net book value – old print machine $20,000Total cost of new machine $180,000Down payment on new machine $35,000Sale price of old machine $30,000Tax rate 30%What is the net total of relevant costs on January 2, year 2?a. $173,000b. $153,000c. $28,000d. 8,000.
Trinkle Company, Incorporated made several purchases of long-term assets in Year 1. The details of each purchase are presented here. New Office Equipment List price: $36,100; terms: 2/10 n/30; paid within discount period. Transportation-in: $740. Installation: $580. Cost to repair damage during unloading: $615. Routine maintenance cost after six months: $260. Basket Purchase of Copier, Computer, and Scanner for $51,900 with Fair Market Values Copier, $22,500. Computer, $11,250. Scanner, $28,750. Land for New Warehouse with an Old Building Torn Down Purchase price, $75,700. Demolition of building, $5,070. Lumber sold from old building, $1,090. Grading in preparation for new building, $8,000 Construction of New Building Construction of new building, $231,000 RequiredIn case of office equipment, determine the amount of cost to be capitalized in the asset accounts. In case of basket purchase, determine the amount of cost to be capitalized in the asset accounts. In case of land,…
Exchanged a display case put in service on 1 April, 2 years prior (original cost $21000, $0 salvage value) for a new display case, list price $25000; terms FOB, destination. The trade-in allowance was $18000 and the balance due of $7000 was paid in cash. Freight costs are $65 and insurance in transit was $45. Display cases are classified as Store and Office Equipment. The estimated useful life of both old and new cases is 10 years. Record this transaction in the GJ. Hint: the cost of the new equipment is $25000.
On 1 May 2020, Ron Trading purchased a new machine. The following paymentsrelate to the machine.List price $21,500Purchase discount $2,000Transportation cost $300Repair of damage parts incurred in transporting the machine $1,000Fees paid to test the machine before use $500Fees paid to the installer to install the machine $800Machine operator’s salary for the first month of operation $3,000Maintenance costs for the first month of operation $300(i) Identify and compute the cost of the machine to be recognised. Explainyour reasoning.(ii) Journalise the transactions. Assume the above payments are paid in cash.
New Office Equipment List price: $60,000; terms: 2/10, n/30; paid within the discount period. Transportation-in: $1,500. Installation: $2,500. Cost to repair damage during unloading: $650. Routine maintenance cost after eight months: $350. determine the amount of cost to be capitalized in the asset account office equipment: ?
Current Attempt in Progress Waterway Company purchased equipment on January 1 at a list price of $121500, with credit terms 2/10, n/30. Payment was made within the discount period and Waterway was given a $2430 cash discount. Waterway paid $6400 sales tax on the equipment, and paid installation charges of $1760. Prior to installation, Waterway paid $3600 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment? O $133260 O $127230 O $130830 O $125470
ABC Corp. acquired a new equipment. It had the following details: Invoice price of the machinery P 2,000,000 Trade discount 3% Cash discount but not taken 50,000 Freight 60,000 Cost of removing old machinery 30,000 Carrying value of the old equipment 300,000 Loss on retirement of equipment 70,000 Dismantling cost of old equipment (estimated atthe beginning and incurred on date ofdismantling) 50,000 Installation cost of new machinery 60,000 6. What is the capitalized cost of the new machinery?
Ronson recently purchased a new boat to help ship product overseas. The following information is related to that purchase: purchase price $4,500,000 cost to bring boat to production facility $15,000 yearly insurance cost $12,000 pays annual maintenance cost of $22,000 received a 10% discount on sales price Determine the acquisition cost of the boat and record the journal entry needed.
A truck was recently purchased for 75,000 with a salvage value of 5,000 and an estimated useful life of eight years or 150,000 miles (24,000 miles per year for the first five years and 10,000 miles per year after that). Enter the new information in the Data Section of the worksheet. Again, make sure the totals for all three methods are in agreement. Print the worksheet. Save this new data as DEPREC5.
Prepare journal entries for the following transactions: a. A machine with a cost of 10,000 and accumulated depreciation of 8,000 was sold for 2,500. b. A machine with a cost of 10,000 and accumulated depreciation of 8,000 was traded for a new machine with a market value of 12,000. Cash of 9,500 was also paid.
Oaktree Company purchased new equipment and made the following expenditures: Purchase price $45,000 2,200 Sales tax Freight charges for shipment of equipment Insurance on the equipment for the first year Installation of equipment 700 900 1,000 The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Prepare the necessary journal entries to record the above expenditures.
Santa Rosa recently purchased a new boat to help ship product overseas. The following information is related to that purchase: Purchase price $4,100,000 Cost to bring boat to production facility $29,000 Yearly insurance cost $29,000 Annual maintenance cost of $40,000 Received 6% discount on sales price A. Determine the acquisition cost of the boat. $? B. Record the journal entry needed. If an amount box does not require an entry, leave it blank.

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