The following data relate to a firm's purchase of a machine used in themanufacture of its product:Invoice priceApplicable sales taxCash discount taken for prompt paymentFreight paidCost of insurance coverage on machine while in transitInstallation costsTesting and adjusting costsRepair of damages to machine caused by the firm's employeesPrepaid maintenance contract for first year of machine's use$30,00o2,0004002601253,000475750300Determine the acquisition cost of the machine.个Acquisition Cost-

Calculate acquistion cost of the machine:

Answered: The following data relate to a firm's…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 63P

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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.
The Rosie Company (a VAT-registered company) paid P231,840, inclusive of 12% value added tax, to buy an equipment. Other costs incurred relating to this equipment are as follows: freight and insurance cost while in transit, P7,500; cost of moving equipment into place at factory P1,900; fees paid to technician for testing cost, P3,500; special plumbing fixtures required for new equipment, P2,800;Insurance paid during the first year of operation, P2,700; Maintenance cost incurred during first year of operation, P2,800. Determine the cost of acquisition of the Equipment.
present in good accounting form AAA Company signed a contract charging a customer P600,000 to change the windows of a customer's house. The contract includes costs for materials and labor. The Company would charge P250,000 for materials if sold separately and P500,000 for labor if the customer will purchase the needed materials. How much of the transaction price would the company allocate to its performance obligation to provide the needed services to the customer?
On January 1, 2019, Sinaran purchased equipment. Following are the costs incurred in connection with the purchase of this equipment: - Purchase price of IDR 500,000,000 plus 10% VAT (IDR 50,000,000) which can be credited - The company pays an independent professional to modify the equipment to fit the specifications desired by the company. The fee paid for professional services is IDR 40,000,000 and for the spare part costs for the modification purposes IDR 10,000,000. - The cost of testing the equipment so that it functions according to its purpose is Rp.25,000,000. - The proceeds from the sale of goods resulting from the testing process are IDR 5,000,000. Requested: Calculate the cost of the equipment according to PSAK 16
Meyer & Smith is a full-service technology company. They provide equipment, installation services as well as training. Customers can purchase any product or service separately or as a bundled package. Carla Vista Corporation purchased computer equipment, installation and training for a total cost of $171180 on March 15, 2021. Estimated standalone fair values of the equipment, installation and training are $88500, $67200 and $34500 respectively. The journal entry to record the transaction on March 15, 2021 will include a credit to Sales Revenue for $171180. debit to Unearned Service Revenue of $34500. credit to Service Revenue of $67200. credit to Unearned Service Revenue of $31050.
Assume that Sohar Aluminium Company purchased a machinery for OMR 2000 and spent OMR200 for its transportation. In addition they paid tax OMR 450 during purchase, Transportation cost OMR 100, Insurance during transportation OMR 50, and Assembling charges OMR 100, installation and testing charges OMR 250. After transportation and installation, the company also paid the insurance premium of OMR 50 to cover the future loss from the machinery due to accidents and breakdowns. Compute the cost of the machinery. a. None of the given options b. OMR3200 c. OMR3100 d. OMR3150
Sheridan Company incurs the following costs in purchasing equipment: invoice price, $40,500; shipping, $1,025; installation and testing, $1,600; one-year insurance policy, $2,750.What is the cost of the equipment?
Hadley Company purchased an asset with a list price of $135580. Hadley paid $413 of transportation-in cost, $968 to train an employee to operate the equipment, and $637 to insure the asset against theft after it has been set up in the factory. The asset was purchased under terms 2/20/n30 and Hadley paid for the asset within the discount period. Based on this information, Hadley would capitalize the asset on its books at what dollar amount? $_______________
Meyer & Smith is a full-service technology company. They provide equipment, installation services as well as training. Customers can purchase any product or service separately or as a bundled package. Container Corporation purchased computer equipment, installation and training for a total cost of $144,000 on March 15, 2021. Estimated standalone fair values of the equipment, installation and training are $90,000, $60,000 and $30,000 respectively. Write the journal entry to record the transaction on March 15, 2021.
Meeker Inc. trades its used machine for a new model at Grand Inc. The used machine has a book value of $8,000 (original cost of $12,000) and a fair value of $4,000. The new model lists for $15,000. Meeker gives Grand a trade-in allowance of $7,000 for the used machine, $3,000 more than its fair value. Prepare a journal entry for Meeker, assuming commercial substance.
Dane ASA bothpurchases and constructs various equipment it uses in its operations. The followingitems for two different types of equipment were recorded in random order during thecalendar year 2019. PurchaseCash paid for equipment, including sales tax of €5,000 €105,000Freight and insurance cost while in transit 2,000Cost of moving equipment into place at factory 3,100Wage cost for technicians to test equipment 6,000Insurance premium paid during first year of operation on this equipment 1,500Special plumbing fixtures required for new equipment 8,000Repair cost incurred in first year of operations related to this equipment 1,300ConstructionMaterial and purchased parts (gross cost €200,000; failed to take 1% cashdiscount)€200,000Imputed interest on funds used during construction (share financing) 14,000Labor costs 190,000Allocated overhead costs (fixed—€20,000; variable—€30,000) 50,000Profit on self-construction 30,000Cost of installing equipment 4,400InstructionsCompute the total cost…
Write CAPITALIZED if the subsequent cost incurred SHALL FORM PART of the carrying amount of the PPE or EXPENSED OUTRIGHT if the subsequent cost incurred SHALL NOT FORM PART of the carrying amount of the PPE. Rearranged the production PPEs in Factory B for P 400,000 to accommodate a newly purchased equipment that will make the production process faster and more efficient. Repaired one of the machineries for P 350,000 as part of factory’s annual examination. Repaired another machinery for P 275,000 to prolong its remaining useful life from five years to seven years. Replaced a significant part of a production equipment for P 900,000. The equipment has an original cost of P 4,000,000 and accumulated depreciation as of date P 1,000,000. The part replaced represented 20% of the carrying amount and it was sold for a very nominal amount.

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