Jackie Fox owns and operates Platinum Transport Co. During the past year, Jackie incurred the following costs related to an 18-wheel truck: Classify each of the costs as a capital expenditure or a revenue expenditure. Costs 1. Changed engine oil. Installed a television in the sleeping compartment of the truck. Installed a wind deflector on top of the cab to increase fuel mileage. 4. Modified the factory-installed turbo charger with a special-order kit designed to add 50 more horsepower to the engine performance. 5. Replaced a headlight that had burned out. 2.

Jackie Fox owns and operates Platinum Transport Co. During the past year, Jackie incurred the following costs related to an 18-wheel truck: Classify each of the costs as a capital expenditure or a revenue expenditure. Costs 1. Changed engine oil. Installed a television in the sleeping compartment of the truck. Installed a wind deflector on top of the cab to increase fuel mileage. 4. Modified the factory-installed turbo charger with a special-order kit designed to add 50 more horsepower to the engine performance. 5. Replaced a headlight that had burned out. 2.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 12RE: Ricks Towing Company owns three tow trucks. During the current year, Rick performed maintenance on...

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Jackie Fox owns and operates Platinum Transport Co. During the past year, Jackie incurred the following costs related to an 18-wheel truck:1. Changed engine oil.2. Installed a television in the sleeping compartment of the truck.3. Installed a wind deflector on top of the cab to increase fuel mileage.4. Modified the factory-installed turbo charger with a special-order kit designed to add 50 more horsepowerto the engine performance.5. Replaced a headlight that had burned out.6. Replaced a shock absorber that had worn out.7. Replaced fog and cab light bulbs.8. ReplacedthehydraulicbrakesystemthathadbeguntofailduringhislatesttripthroughtheRockyMountains.9. Removed the old radio and replaced it with a new communications module.10. Replaced the old radar detector with a newer model that is fastened to the truck with a locking device that prevents its removal.Classify each of the costs as a capital expenditure or a revenue expenditure.
Jackie Fox owns and operates Platinum Transport Co. During the past year, Jackie incurred the following costs related to an 18-wheel truck:1. Changed engine oil.2. Installed a television in the sleeping compartment of the truck.3. Installed a wind deflector on top of the cab to increase fuel mileage.4. Modified the factory-installed turbo charger with a special-order kit designed to add 50 more horsepower to the engine performance.5. Replaced a headlight that had burned out.6. Replaced a shock absorber that had worn out.7. Replaced fog and cab light bulbs.8. Replaced the hydraulic brake system that had begun to fail during his latest trip through the Rocky Mountains.9. Removed the old radio and replaced it with a new communications module.10. Replaced the old radar detector with a newer model that is fastened to the truck with a locking device that prevents its removal.Classify each of the costs as a capital expenditure or a revenue expenditure.
Jaime Baldwin owns and operates Love Transport Co. During the past year, Jaime incurred the following costs related to an 18-wheel truck: 1. Changed engine oil. 2. Installed a wind deflector on top of the cab to increase fuel mileage. 3. Replaced fog and cab light bulbs. 4. Modified the factory-installed turbo charger with a special-order kit designed to add 50 more horsepower to the engine performance. 5. Replaced a headlight that had burned out. 6. Removed the old CB radio and replaced it with a newer model with a greater range. 7. Replaced the old radar detector with a newer model that detects the KA frequencies now used by many of the state patrol radar guns. The detector is wired directly into the cab, so that it is partially hidden. In addition, Jaime fastened the detector to the truck with a locking device that prevents its removal. 8. Replaced the hydraulic brake system that had begun to fail during his latest trip through the Rocky Mountains. 9. Installed a television in…
Assume a (hypothetical) company, Troff erini S. A., incurred the following expendituresto purchase a towel and tissue roll machine: €10,900 purchase price including taxes,€200 for delivery of the machine, €300 for installation and testing of the machine,and €100 to train staff on maintaining the machine. In addition, the company paid aconstruction team €350 to reinforce the factory floor and ceiling joists to accommodatethe machine’s weight. Th e company also paid €1,500 to repair the factory roof (a repairexpected to extend the useful life of the factory by five years) and €1,000 to have theexterior of the factory and adjoining offices repainted for maintenance reasons. Th erepainting neither extends the life of factory and offices nor improves their usability.1. Which of these expenditures will be capitalized and which will be expensed?2. How will the treatment of these expenditures aff ect the company’s financialstatements?
Jay Hawk, maintenance supervisor for Boston InsuranceCo., has purchased a riding lawnmower and accessoriesto be used in maintaining the grounds around corporateheadquarters. He has sent the following information tothe accounting department.Cost of mower and accessories $4,000 Date purchased 7/1/17 Monthly salary of groundskeeper $1,100 Estimated useful life 5 yrsSalvage value $0Estimated annual fuel cost $150 Compute the amount of depreciation expense (related tothe mower and accessories) that should be reported onBoston’s December 31, 2017, income statement.Assume straight-line depreciation.
Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $40,500. In addition, Jose incurred the following expenses before using the van: shipping costs of $1,300; paint to match the other fleet vehicles at a cost of $1,940; registration costs of $2,429, which included $2,200 of sales tax and an annual registration fee of $229; wash and detailing for $53; and an engine tune-up for $253. What is Jose's cost basis for the delivery van?
Ricks Towing Company owns three tow trucks. During the current year, Rick performed maintenance on the trucks and realized he had to make improvements to the engines on two of his trucks. The improvements totaled 55,000. Prepare the journal entries Rick may make under two alternative methods for the improvements made to his trucks.
US Freight Lines Co. incurred the following costs related to trucks and vans used in operating its delivery service:1. Installed GPS systems on the trucks.2. Replaced the transmission fluid on a truck that had been in service for the past four years.3. Overhauled the engine on one of the trucks purchased three years ago.4. Performed annual service of installing new spark plugs, changing the oil, and greasing the joints of all trucks and vans.5. Rebuilt the engine on one of the vans that had been driven 80,000 miles.6. Repaired a flat tire on one of the vans.7. Installed a hydraulic lift to a truck.8. Tinted the back and side windows of the vans and installed a security system to discourage theft of contents.9. Replaced a truck’s suspension system with a new suspension system, allowing for heavier loads.10. Installed an optional third-row seat on one of the vans.Classify each of the costs as a capital expenditure or a revenue expenditure.
Karl has been hired to install a new air conditioning system in a building. The total cost of the project is $14,000. Karl charges $1,500 for labor plus 1/6 of the cost of the equipment and supplies. If Karl's expenses for the equipment and supplies are $4,000 more than his estimate, how much did the equipment and supplies cost? Mmhnmkuuhbjj
hawler is a small manufacturing company specialising in making alloy casings. its main item of plant is a furnace which was purchased on 1 october 20x1. the furnace has two components: the main body (cost $60,000 including the environmental provision – see below) which has a ten-year life, and a replaceable liner (cost $10,000) with a five-year life. the manufacturing process produces toxic chemicals which pollute the nearby environment. legislation requires that a clean-up operation must be undertaken by shawler on 30 september 20y1 (ten years after 20x1) at the latest. shawler received a government grant of $12,000 relating to the cost of the main body of the furnace only. the following are extracts from shawler's statement of financial position as at 30 september 20x3 (two years after the acquisition of the furnace). carrying amount $ non-current assets furnace: main body 48,000 replaceable liner 6,000 current liabilities government grant 1,200 non-current liabilities government…
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?
Bryan followed in his father’s footsteps and entered into the carpet business. He owns and operates I Do Carpet (IDC). Bryan prefers to install carpet only, but in order to earn additional revenue, he also cleans carpets and sells carpet-cleaning supplies. IDC contracted with a homebuilder in December of last year to install carpet in 10 new homes being built. The contract price of $87,500 includes $53,000 for materials (carpet). The remaining $34,500 is for IDC’s service of installing the carpet. The contract also stated that all money was to be paid up front. The homebuilder paid IDC in full on December 28 of last year. The contract required IDC to complete the work by January 31 of this year. Bryan purchased the necessary carpet on January 2 and began working on the first home January 4. He completed the last home on January 27 of this year. IDC entered into several other contracts this year and completed the work before year-end. The work cost $160,000 in materials, and IDC…