HnH Solutions acquired a machine by making the following payments: Net cash price Rs. 116,000 including 16% Sales tax; Carriage in Rs. 6,000; Insurance in transit Rs. 5,000; Fire insurance for the next 4 years Rs. 8,000; Installation charges Rs. 20,000; Overhauling Charges (Before Use); Charges to repair the damage caused during installation Rs. 2,000. REQUIRED: Classify the above payments into capital expenditures and revenue expenditures. Give and entry to record acquisition of machine, and another entry to record expenditures by Debiting General Expenses Account.
HnH Solutions acquired a machine by making the following payments: Net cash price Rs. 116,000 including 16% Sales tax; Carriage in Rs. 6,000; Insurance in transit Rs. 5,000; Fire insurance for the next 4 years Rs. 8,000; Installation charges Rs. 20,000; Overhauling Charges (Before Use); Charges to repair the damage caused during installation Rs. 2,000. REQUIRED: Classify the above payments into capital expenditures and revenue expenditures. Give and entry to record acquisition of machine, and another entry to record expenditures by Debiting General Expenses Account.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 4PB: During the current year, Arkells Inc. made the following expenditures relating to plant machinery. ...
Related questions
Question
HnH Solutions acquired a machine by making the following payments:
Net cash price Rs. 116,000 including 16% Sales tax; Carriage in Rs. 6,000; Insurance in transit Rs. 5,000; Fire insurance for the next 4 years Rs. 8,000; Installation charges Rs. 20,000; Overhauling Charges (Before Use); Charges to repair the damage caused during installation Rs. 2,000.
REQUIRED:
- Classify the above payments into capital expenditures and revenue expenditures.
- Give and entry to record acquisition of machine, and another entry to record expenditures by Debiting General Expenses Account.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 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
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning