State whether they are capital and revenue expenditures. (a) Construction of building $10,00,000. (b) Repairs to furniture $50,000. (c) White-washing the building $80,000. (d) Pulling down the old building and rebuilding $4,00,000.
Q: urchased land costs 2,500,000 and a Bank transfer is made. The cost of excavation of the old…
A:
Q: Tri-City Ironworks Co. reported $65,500,000 for equipment and $33,415,000 for accumulated…
A: Note: “Since you have asked multiple question, we will solve the first question for you. If you want…
Q: Mendenhall Corporation constructed a building at a cost of $14,000,000. Weighted-average accumulated…
A: Interest to be capitalized is the interest on borrowings during construction period. Given in the…
Q: Tri-City Ironworks Co. reported $44,500,000 for equipment and $29,800,000 for accumulated…
A: a)
Q: On January 1, 20x1, Entity A obtained a 12%, ₱6,000,000 loan, specifically to finance the…
A: Historical cost is the worth of an asset when it is acquired. This value is termed historical when…
Q: A company purchased land for $80,000 cash. Real estate brokers' commission was $5,000 and $10,000…
A: As per IAS 16, The cost of property, plant, and equipment includes the purchase price, any cost to…
Q: The following allotment and NCA were received by Agency LMN from DBM: P10 million for capital…
A: Allotment and NCA Received by Agency LMN Capital Outlay 10,000,000.00 Maintenance and…
Q: On January 1, 20x1, Entity A obtained a 10%, ₱5,000,000 loan, specifically to finance the…
A: Interest on loan = Amount borrowed x rate of interest x no. of years = ₱5,000,000 x % x 1 = ₱500,000
Q: The following allotment and NCA were received by Agency MNL from DBM: P9 million for capital outlay;…
A: INTRODUCTION: DBM (Department of Budget and Management): The department is in charge of sensible and…
Q: Isabela Company commercial operations at the beginning of the current year. The following costs are…
A: Land and building are the different classes of tangible assets (physical assets). Their value is…
Q: A company purchased land for R.O.70,000 cash. Real estate brokers' commission was R.O.5,000 and…
A: Given information is: Purchase price of land = 70,000 Broker's Commission = 5000 Cost of demolishing…
Q: Identify the following expenditures as capital expenditures or revenue expenditures:a. Immediately…
A: Meaning of revenue and capital expenditure Capital expenditure are those expenses which are acquired…
Q: 1. Identify whether each of the following items represents a capital or non-capital expenditure.…
A: Capital expenditure is the expenditure incurred to acquire and maintain the physical long term…
Q: On January 1, 2021, Fantastic Corporation received cash of P8,000,000 from a local government to be…
A:
Q: A company paid $150,000, plus a 7% commission and $5,000 in closing costs for a property. The…
A: Property Cost = $150,000 + ($150,000*7%) +$5,000 Property Cost = $150,000+ $10500+$5000= $165500…
Q: Nizwa township general fund acquired vehicles for the police department at the beginning of January…
A: Calculation of depreciation using SLM Straight-Line Depreciation Formula · Depreciation in Any…
Q: Purchased land - $120,000, paid $9,000 to tear down a dilapidated building, paid $15000 to install a…
A: Land: It is generally considered to have unlimited life and it's not depreciated. The land is…
Q: Bonita Company is constructing a building. Construction began on February 1 and was completed on…
A: A weighted average interest rate is an average that is adjusted to reflect the contribution of…
Q: A 33 unit apartment building is purchased for $3.73 million. In addition, the purchaser paid $28,000…
A: Depreciation:-It is the expenses that occur due to the normal wear and tear of an asset and the…
Q: Shamrock Company is constructing a building. Construction began on February 1 and was completed on…
A: Weighted average Interest Rate is calculated by aggregate of all interest payments in period divided…
Q: On August 1, 20x1, ABC Co. received a P1,800,000 grant from the government to aid in ABC Co.’s…
A: Government grants: This is given to a corporation by a state, federal, or local government to help…
Q: Riverbed Company is constructing a building. Construction began on February 1 and was completed on…
A: Date Expenditure Fraction Weighted Average March 1 $1,620,000 10/12 $1,350,000 June 1 $1,080,000…
Q: if answered within 30mins,it would be appreciable!! The parking garage and parking lots owned by…
A: An Income Statement is a statement that shows the company’s income and expenditure.
Q: Some of the following items should be treated as capital and some as revenue. Carriage paid to bring…
A: Capital Expenditure- It is the expenditure that is incurred for purchasing of assets or for the…
Q: A company paid $326,000 for property that included land, land improvements, and a building. The land…
A:
Q: Lance is entering an invoice for a new item of equipment in the accounts. The invoice shows the…
A: Capital expenditures: These costs are incurred to extend the useful life, production capacity, and…
Q: Snowbird Company is constructing a building that qualifies for interest capitalization. It is built…
A: Interest on Specific borrowing is to be capitalized from 1st April (Date from which recognition…
Q: During 2021, Colorado Company constructed a 3-storey building. The weighted average expenditures for…
A: Since it is given weighted average expenditure for capitalization, we consider the borrowing are…
Q: apitalization of interest during 2021 amounted to P 23,600,000. The existing debt of Colorado are…
A: SOLUTION- CAPITALIZATION RATE = (TOTAL INTEREST / TOTAL BORROWING ) *100…
Q: P8,000,000 from a local government to be used in constructing a PROBLEM 3: EXERCISE On January 1,…
A: SOLUTION- GRANT IS ASSISTANCE OR AN INCENTIVE IN RETURN FOR COMPLIANCE OF CERTAIN CONDITIONS IF…
Q: On January 1, 20x1, ABC Co. received 2,000,000 grant from the government to aid in the construction…
A: Government grants are the financial assistance provided by the government to an entity to buy an…
Q: Columbia Company incurred the following expenditures related to the land and building: Payment for…
A: The property, plant and equipment is initially measured at its cost. As per IAS 16 cost includes: 1.…
Q: Ayayai Company is constructing a building. Construction began on February 1 and was completed on…
A: Expenditure on March 1 = $3,600,000 Expenditure on June 1 = $4,000,000 Expenditure on December 31 =…
Q: . A company paid $326,000 for property that included land, land improvements, and a building. The…
A: A land improvement is any investment made in the land to make it more usable.
Q: Bonita Industries is constructing a building. Construction began on January 1 and was completed on…
A: The product of expenditures on a qualified asset and a fraction reflecting the capitalization…
Q: Concord Corporation is constructing a building. Construction began on January 1 and was completed on…
A: Notes borrowed to help finance construction of the building should not be consider for the determine…
Q: For each of the following items, indicate if it is a Capital Expenditures (CE) or Revenue…
A: There are two type of expenditures being made in business. One is capital expenditure and other is…
Q: On January 1, 20x1, Entity A obtained a 12%, ₱6,000,000 loan, specifically to finance the…
A: Historical cost in accounting refers to the cost of acquiring a fixed asset. In accounting, any…
Q: Classify the following items as either revenue or capital expenditure: An extension to an office…
A: Since there are multiple sub parts it is possible to solve only 3 sub parts as per company policy.
Q: 1. Classify the following as either a revenue expenditure (RE) or a capital expenditure (CE). a.…
A:
Q: An industrial plant bought a generator set for 90,000. Other expenses including installation…
A: Depreciation Expenses: It is the portion of a fixed asset which has been considered as utilized…
Q: The New Hospital has raised money for new oncology wing. The hospital has also acquired medical…
A: Given data, Cost of equipment =$500,000 Shipping cost =$15,000 Installation cost =$40,000 Total cost…
Q: ABC Company had the following outstanding loans during 20X1 and 20X2. 10% Specific construction…
A: Borrowing cost refers to the interest cost and other costs incurred concerning the borrowed funds.
Q: A company paid $150,000, plus a 6% commission, and $4,000 in closing costs for a property. The…
A: Property, Plant, and Equipment or PP&E is a classification shown on a balance sheet. It normally…
Q: Marie Company had a 10% P3,000,000 specific construction loan and 12% P25,000,000 general loan…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: The following expenditures and receipts are related to land, land improvements, and buildings…
A: Expenditure refers to the amount spend to acquire something in order to generate revenue in…
Q: Identify the following expenditures as capital expenditures or revenue expenditures. Immediately…
A: Expenditures: The useful life of the plant assets signifies the time period, that the company…
Q: Whispering Company is constructing a building. Construction began on February 1 and was completed on…
A: To find out the avoidable interest of the whispering company we need to calculate the following: 1.…
Q: Sweet Company is constructing a building. Construction began on February 1 and was completed on…
A: In order to determine the weighted average interest rate, the total amount is interest on debt…
State whether they are capital and revenue expenditures.
(a) Construction of building $10,00,000.
(b) Repairs to furniture $50,000.
(c) White-washing the building $80,000.
(d) Pulling down the old building and rebuilding $4,00,000.
Step by step
Solved in 2 steps with 1 images
- 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 repairsJohnson, 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?Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is worth 100,000 and the building is worth 300,000. What cost should Utica assign to the land and to the building, respectively?
- 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 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 extraordinary repairs Depreciation expense recorded for the year is $15,000. If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Johnsons balance sheet resulting from this years transactions? What amount did Johnson report on the income statement for expenses for the year?During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated five machines for $100,000 to improve efficiency in production of their remaining useful life of five years Low-cost repairs throughout the year totaled $70,000 Replaced a broken gear on a machine for $10,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated seven machines for $250,000 to improve efficiency in production of their remaining useful life of eight years Low-cost repairs throughout the year totaled $79,000 Replaced a broken gear on a machine for $6,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?
- A corporation, with a December 31, 2021 year-end, purchased manufacturing equipment for $60,000 on January 1 and a delivery truck for 55,000 on June 30. It sold on June 30, an old delivery truck that originally cost $15,000, for $4,500. The other relevant information is: Asset Cost undepreciated capital cost (UCC) Building $ 100,000 $ 98,500 Furniture 25,000 22,500 Automotive Equipment 90,000 76,500 What is the maximum CCA the corporation would claim in its 2021 taxation year?On January 1, 20x1, ABC Co. received 2,000,000 grant from the government to aid in the construction of a new building. The construction of the building was finished on March 31, 20x2 for a total cost of 6,000,000. The building is estimated to have a useful life of 30 years and a residual value of 1,000,000. If ABC Co. uses the net presentation, how much is the depreciation expense in 20x1?A company paid $326,000 for property that included land, land improvements, and a building. The land was appraised at $175,000, the land improvements were appraised at $70,000, and the building was appraised at $105,000. What is the allocation of costs to the three assets? a. Land, $150,000; Land Improvements, $60,000; Building, $90,000 b. Land, $163,000; Land Improvements, $65,200; Building, $97,800 c. Land, $150,000; Land Improvements, $61,600; Building, $92,400 d. Land, $159,000; Land Improvements, $65,200; Building, $95,400 e. Land, $175,000; Land Improvements, $70,000; Building, $105,000
- Tri-City Ironworks Co. reported $44,500,000 for equipment and $29,800,000 for accumulated depreciation—equipment on its balance sheet.Does this mean (a) that the replacement cost of the equipment is $44,500,000 and (b) that $29,800,000 is set aside in a special fund for the replacement of the equipment? Explain.On January 1, 20x1, ABC Co. received 2,000,000 grant from the government to aid in the construction of a new building. The construction of the building was finished on March 31, 20x2 for a total cost of 6,000,000. The building is estimated to have a useful life of 30 years and a residual value of 1,000,000. If ABC Co. uses the gross presentation, how much is the income from the government grant in 20x1? If ABC Co. uses the gross presentation, how much is the carrying amount of the building on December 31, 20x2? If ABC Co. uses the gross presentation, how much is the income from the government grant in 20x2? If ABC Co. uses the gross presentation, how much is the depreciation expense in 20x2? If ABC Co. uses the gross presentation, how much is the balanced of the deferred income from government grant on December 31, 20x2? If ABC Co. uses the net presentation, how much is the carrying amount of the building on December 31, 20x2? If ABC Co. uses the net presentation, how much is the…A company began constructing a new warehouse for its operations during the current year. In the year the company incurred interest of $20,000 on a working capital loan, and interest on a construction loan for the warehouse of $80,000. Interest computed on the average accumulated expenditures for the warehouse construction was $40,000. What amount of interest should be expensed for the year?
