How do I do a general journal on this entry? Master Flow purchased a specialized pipe bending machine for the Warehouse. The machine has a purchase price of $8,000. It will cost $300 to have it delivered; $500 to have it setup and it requires a custom platform that will cost $1,000. The machine uses disposable grommets. Scott purchases an initial lot of $200 pieces of the disposable grommets for $200. The Manufacturer for the Machine is providing $10,000, 90 Day financing at a 10% interest rate for the purchase.

How do I do a general journal on this entry? Master Flow purchased a specialized pipe bending machine for the Warehouse. The machine has a purchase price of $8,000. It will cost $300 to have it delivered; $500 to have it setup and it requires a custom platform that will cost $1,000. The machine uses disposable grommets. Scott purchases an initial lot of $200 pieces of the disposable grommets for $200. The Manufacturer for the Machine is providing $10,000, 90 Day financing at a 10% interest rate for the purchase.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 13PB: Jamboree Outfitters, Inc., produces pocket knives and fillet knives for outdoor sporting. In the...

See similar textbooks

Similar questions

Keith Golding has decided to purchase a personal computer. He has narrowed his choices to two: Brand A and Brand B. Both brands have the same processing speed, hard disk capacity, RAM, graphics card memory, and basic software support package. Both come from companies with good reputations. The selling price for each is identical. After some review, Keith discovers that the cost of operating and maintaining Brand A over a three-year period is estimated to be 200. For Brand B, the operating and maintenance cost is 600. The sales agent for Brand A emphasized the lower operating and maintenance cost. She claimed that it was lower than any other PC brand. The sales agent for Brand B, however, emphasized the service reputation of the product. She provided Keith with a copy of an article appearing in a PC magazine that rated service performance of various PC brands. Brand B was rated number one. Based on all the information, Keith decided to buy Brand B. Required: 1. What is the total product purchased by Keith? 2. Is the Brand A company pursuing a cost leadership or differentiation strategy? The Brand B company? Explain. 3. When asked why he purchased Brand B, Keith replied, I think Brand B offered more value than Brand A. What are the possible sources of this greater value? If Keiths reaction represents the majority opinion, what suggestions could you offer to help improve the strategic position of Brand A?
Jonfran Company manufactures three different models of paper shredders including the waste container, which serves as the base. While the shredder heads are different for all three models, the waste container is the same. The number of waste containers that Jonfran will need during the following years is estimated as follows: The equipment used to manufacture the waste container must be replaced because it is broken and cannot be repaired. The new equipment would have a purchase price of 945,000 with terms of 2/10, n/30; the companys policy is to take all purchase discounts. The freight on the equipment would be 11,000, and installation costs would total 22,900. The equipment would be purchased in December 20x4 and placed into service on January 1, 20x5. It would have a five-year economic life and would be treated as three-year property under MACRS. This equipment is expected to have a salvage value of 12,000 at the end of its economic life in 20x9. The new equipment would be more efficient than the old equipment, resulting in a 25 percent reduction in both direct materials and variable overhead. The savings in direct materials would result in an additional one-time decrease in working capital requirements of 2,500, resulting from a reduction in direct material inventories. This working capital reduction would be recognized at the time of equipment acquisition. The old equipment is fully depreciated and is not included in the fixed overhead. The old equipment from the plant can be sold for a salvage amount of 1,500. Rather than replace the equipment, one of Jonfrans production managers has suggested that the waste containers be purchased. One supplier has quoted a price of 27 per container. This price is 8 less than Jonfrans current manufacturing cost, which is as follows: Jonfran uses a plantwide fixed overhead rate in its operations. If the waste containers are purchased outside, the salary and benefits of one supervisor, included in fixed overhead at 45,000, would be eliminated. There would be no other changes in the other cash and noncash items included in fixed overhead except depreciation on the new equipment. Jonfran is subject to a 40 percent tax rate. Management assumes that all cash flows occur at the end of the year and uses a 12 percent after-tax discount rate. Required: 1. Prepare a schedule of cash flows for the make alternative. Calculate the NPV of the make alternative. 2. Prepare a schedule of cash flows for the buy alternative. Calculate the NPV of the buy alternative. 3. Which should Jonfran domake or buy the containers? What qualitative factors should be considered? (CMA adapted)
Joe purchased a delivery van for his business through an online auction. His winning bid for the van was $24,500. In addition, Jose incurred the following expenses before using the van: shipping cost of $650; paint to match the other fleet vehicles at a cost of $1,000; registration costs of $3,200. Which included $3,000 of sales tax and an annual registration fee of $200; wash and detailing for $50; and an engine tune-up for $250. What is Jose’s cost basis for the delivery van?
Kelly Slater desires to purchase a new front office computer system for his Surfers Paradise Inn. After considerable discussion with purveyors, he has narrowed his choices to systems sold by M. Fanning ltd. and Jamie O’Brien and Co. The associated costs of each system are as follows: M. Fanning ltd. O’Brien and Co. Initial Costs 29,000 31,000 Annual Costs: Labour 22,000 22,000 Utilities 800 600 Supplies 1,500 1,500 Maintenance 2,500 1,500 Salvage Value (in 8 years) 3,000 5,000 Required: 1.Which are sunk costs? 2.Identify the irrelevant costs and explain why these costs are irrelevant! 3.Prepare a comparative cost analysis for the two alternatives. Ignore the time value of money and taxes. Include the relevant costs. 4.Which alternative do you recommend purchasing? Explain why!
Thomson Printing Company is a buyer and seller of used machinery. On April 10, the president of the company, James Thomson, went to the surplus machinery department of B.F. Goodrich Company in Akron, Ohio, to examine some used equipment that was for sale. Thomson discussed the sale, including a price of $9,000, with Ingram Meyers, a Goodrich employee and agent. Four days later, on April 14, Thomson sent a purchase order to confirm the oral contract for purchase of the machinery and a partial payment of $1,000 to Goodrich in Akron. The purchase order contained Thomson Printing’s name, address, and telephone number, as well as certain information about the purchase, but did not specifically mention Meyers or the surplus equipment department. Goodrich sent copies of the documents to a number of its divisions, but Meyers never learned of the confirmation until weeks later, by which time the equipment had been sold to another party. Thomson Printing brought suit against Goodrich for breach…
McDonald (Agricultural Engineers) Ltd recently built a machine for a farmer at a cost of £22,000. The farmer, however, was recently declared bankrupt and so is unable to take delivery of the machine. Another farmer has offered to buy the machine if certain adaptations are made. These adaptations will require four components, which are held in inventories. The components cost £800 each and are frequently used by the business. The current replacement price per component is £850 and their realisable value is £420 per component. To fit the components, skilled labour, which costs £18 per hour must be used. The job will take 16 hours and it will mean taking two workers off another job. This job could be done by semi-skilled workers, who are paid £12 per hour but have no work available until next week. The business has received an offer from an agricultural supplier to buy the machine in its current condition for £10,000. What is the minimum price at which the business should…
W bought a new printing machine from abroad. The cost of the machine was $80,000. The installation costs were $5,000 and the employees received specific training on how to use this particular machine, at a cost of $2,000. Before using the machine to print customers' orders, a test was undertaken and the paper and ink cost $1,000. What should be the cost of the machine in the company's statement of financial position?
W bought a new printing machine. The cost of the machine was $80,000. The installation costs were $5,000 and the employees received training on how to use the machine, at a cost of $2,000. Before using the machine to print customers' orders, a test was undertaken and the paper and ink cost $1,000. What should be the cost of the machine in the company's statement of financial position?
Olga was planning to set up a business where she would purchase paintings for $1,050 per unit and sell them for $1,800 per unit. She wanted to conduct a break-even analysis and identified the following costs for running her business: $4,470.00 per month for store leasing, $54 per month website hosting fee, $5,150 per month for staff salary, $2,040 per month for advertising costs, and $25 per unit for labour charges to pack the paintings. a. How many paintings would she have to sell per month to break-even? Round up to the next whole number b. If she wants to make a profit of $24,000 in a month, how many paintings would she have to sell? Round up to the next whole number
Having recently graduated with a visual arts degree, Zane is considering starting a new business in this field, selling exotic artwork. He believes he can sell each piece of artwork for an average price of $600. The suppliers of the artwork will be paid a commission of 25% of the price. Artwork will be packed and delivered to the customer. Zane estimates that packing and delivery costs should be about $30 per product. There will be additional expenses associated with running the store. Rent will be $5,400 per month. Utilities (which it is assumed will not vary from month to month) will be $990 per month. Insurance and other expenses will be $750 per month. He plans to pay himself and one sales assistant salaries of $10,500 per month ($7,500 for himself and $3,000 for his assistant). The tax rate is assumed by Zane to be 30%. Required: a. Based on the information how many pieces of artwork per month would Zane need to sell to break even? Show all workings. b. If Zane wanted to earn a…
On January 1, 2018, Lego Construction Company signed a contract to build a custom garage for a customer andreceived $10,000 in advance for the job. The new garage will be built on the customer’s land. To complete thisproject, Lego must first build a concrete floor, construct wooden pillars and walls, and finally install a roof. Legonormally charges stand-alone prices of $3,000, $4,000, and $5,000, respectively, for each of these three smallertasks if done separately. How many performance obligations exist in this contract?
On January 1, 2021, Lego Construction Company signed a contract to build a custom garage for a customer and received $10,000 in advance for the job. The new garage will be built on the customer’s land. To complete this project, Lego must first build a concrete floor, construct wooden pillars and walls, and finally install a roof. Lego normally charges stand-alone prices of $3,000, $4,000, and $5,000, respectively, for each of these three smaller tasks if done separately. How many performance obligations exist in this contract?