HP Company purchased equipment on January 1 at a list price of $127,000, with credit terms 2/10, n/30. Payment was made within the discount period and Yocum was given a $21,400 cash discount. Yocum paid $6,000 sales tax on the equipment, and paid installation charges of $11,760. Prior to installation, Yocum paid $4,000 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment? Select one: a. $123,600 b. $129,360 c. $131,760 d. The answer does not exist e. $125,360

HP Company purchased equipment on January 1 at a list price of $127,000, with credit terms 2/10, n/30. Payment was made within the discount period and Yocum was given a $21,400 cash discount. Yocum paid $6,000 sales tax on the equipment, and paid installation charges of $11,760. Prior to installation, Yocum paid $4,000 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment? Select one: a. $123,600 b. $129,360 c. $131,760 d. The answer does not exist e. $125,360

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5EA: Steele Corp. purchases equipment for $25,000. Regarding the purchase, Steele recorded the following...

See similar textbooks

Similar questions

Steele Corp. purchases equipment for $25,000. Regarding the purchase, Steele recorded the following transactions: Paid shipping of $1,000 Paid installation fees of $2,000 Pays annual maintenance cost of $200 Received a 5% discount on $25,000 sales price Determine the acquisition cost of the equipment.
Rix Company sells home appliances and provides installation and service for its customers. On April 1, 2019, a customer purchased a dishwasher that Rix normally sells for 1,000. In addition, the customer purchased the installation service and a 3-year service contract, with stand-alone selling prices of 200 and 400, respectively. Because the customer purchased all three items as a bundle, Rix charged the customer 1,400. Required: 1. How should the transaction price be allocated among the products? 2. Prepare the journal entries to recognize revenue related to each product in 2019.
Air Compressors Inc. purchases compressor parts for its inventory from a supplier. The following transactions take place during the current year: A. On April 5, the company purchases 400 parts for $8.30 per part, on credit. Terms of the purchase are 4/ 10, n/30, invoice dated April 5. B. On May 5, Air Compressors does not pay the amount due and renegotiates with the supplier. The supplier agrees to $400 cash immediately as partial payment on note payable due, converting the debt owed into a short-term note, with a 7% annual interest rate, payable in three months from May 5. C. On August 5, Air Compressors pays its account in full. Record the journal entries to recognize the initial purchase, the conversion plus cash, and the payment.
Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for major repairs Depreciation expense recorded for the year is $25,000 If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jadas balance sheet resulting from this years transactions? What amount did Jada report on the income statement for expenses for the year?
Williams Corporation had the following purchases for May: May 3Bought ten lawn rakes from Owens Company, invoice no. J34Y9, 250.25; terms net 15 days; dated May 1; FOB shipping point, freight prepaid and added to the invoice, 15 (total 265.25). 11Bought one weed trimmer from Lionels Lawn Landscaping, invoice no. R7740, 219.72; terms 2/10, n/30; dated May 9; FOB shipping point, freight prepaid and added to the invoice, 35 (total 254.72). 15Bought five bags of fertilizer from Wrights Farm Supplies, invoice no. 478, 210.97; terms net 30 days; dated May 13; FOB destination. 25Bought one lawn mower from Gutierrez Corporation, invoice no. 2458, 425.39; terms net 30 days; dated May 22; FOB destination. Assume that Williams Corporation had beginning balances on May 1 of 3,492.29 (Accounts Payable 212), 4,239.49 (Purchases 511), and 234.89 (Freight In 514). Record the purchases of merchandise on account in the purchases journal (page 13) and then post to the general ledger.
Johnson, Incorporated had the following transactions during the year: Purchased a building for $5,000,000 using a mortgage for financing Paid $2,000 for ordinary repair on a piece of equipment Sold product on account to customers for $1,500,600 Purchased a copyright for $5,000 cash Paid $20,000 cash to add a storage shed in the corner of an existing building Paid $360,000 in monthly salaries Paid $25,000 for routine maintenance on equipment Paid $110,000 for major repairs If all transactions were recorded properly, what amount did Johnson capitalize for the year, and what amount did Johnson expense for the year?
Garcia Co. owns equipment that costs $150,000, with accumulated depreciation of $65,000. Garcia sells the equipment for cash. Record the journal entry for the sale of the equipment if Garcia were to sell the equipment for the following amounts: A. $90,000 cash B. $85,000 cash C. $80,000 cash
Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for extraordinary repairs If all transactions were recorded properly, what amount did Jada capitalize for the year, and what amount did Jada expense for the year?
For each of the following transactions, state whether the cost would be capitalized (C) or recorded as an expense (E). A. Purchased a machine, $100,000; gave long-term note B. Paid $600 for ordinary repairs C. Purchased a patent for $45,300 cash D. Paid $200,000 cash for addition to old building E. Paid $20,000 for monthly salaries F. Paid $250 for routine maintenance G. Paid $16,000 for major repairs
On March 1, Bartholomew Company purchased a new stamping machine with a list price of $88,000. The company paid cash for the machine; therefore, it was allowed a 5% discount. Other costs associated with the machine were: transportation costs, $3100; sales tax paid, $6,720, installation costs, $1,900; routine maintenance during the first month of operation, $3,000. The cost recorded for the machine was:
ABC Company purchased a new printing machine on December 1 at an invoice price of P4,000,000 with terms 2/10, n/30. On December 15, Cabiao paid the required amount for the machine. The installation costs were P50,000 and the employees received training on how to use the machine, at a cost of P20,000. Before using the machine to print customers’ orders, a test was undertaken and the paper and ink cost P5,000. What amount should be capitalized as cost of the machine? A. 3,995,000 B. 3,970,000 C. 3,975,000 D. 4,075,000
Wildhorse Co. purchased equipment on January 1 at a list price of $155000, with credit terms 3/10, n/30. Payment was made within the discount period. Wildhorse paid $6500 sales tax on the equipment, and paid installation charges of $2100. Prior to installation, Wildhorse paid $3500 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment?