Immediately after a used truck is acquired, a new motor is installed at a total cost of $3,850. Is this a capital expenditure or a revenue expenditure?
Q: A company made the following expenditures in connection with the construction of a new building:…
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: On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $41,000 in…
A: Solution: Cost of land to be reported = $377,305 Cost of land = cash paid to acquire land +…
Q: On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $90,000 and…
A:
Q: During the current year, Central Auto Rentals purchased 60 new automobiles at a cost of $14,880 per…
A: Meaning of Units of Production MethodDepreciation is a decrease in the value of assets due to…
Q: Ngo Company purchased a truck for $54,000. Sales tax amounted to $5,400; shipping costs amounted to…
A: Capitalization is the process by which the long-term asset is recorded on the balance sheet and its…
Q: Revson Corporation purchased land adjacent to its plant to improve access for trucks making…
A: We have the following information: Purchase price: $55,000 Broker’s fees: $6,000 Title search and…
Q: The equipment of ABC Co. has a historical cost of ₱500,000 and an accumulated depreciation of…
A: The carrying amount of equipment is calculated by deducting accumulated depreciation from the…
Q: During the current year, Central Auto Rentals purchased 60 new automobiles at a cost of $14,880 per…
A: What is units-of-output method? The Units of Output method is also known as the productive output,…
Q: Indicate which of the following costs should be expensed when incurred. a. $13,000 paid to…
A:
Q: On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $41,000 in…
A: Solution:- Calculation of the cost of land reported on the balance sheet as follows:-
Q: An industrial plant bought a generator set for 99,000. Other expenses including installation…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: At what amount will the office building be shown in Tibet’s statement of financial position as at 31…
A: Depreciation as per straight line method = (Original Cost - Residual Value) / Useful Life
Q: Four Corners Delivery Company acquired an adjacent lot to construct a new warehouse, paying $41,000…
A: Cost of land = Cash paid to acquire land + Short-term note + legal fees + delinquent taxes + fees…
Q: Mad Hatter Enterprises purchased new equipment for $362,000, terms f.o.b. shipping point. Other…
A: Note: Insurance, after the equipment is placed in service and Insurance for the first year of…
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: Assume that Sohar Aluminium Company purchased a machinery for OMR 2000 and spent OMR200 for its…
A: Formula: Total cost of machinery = Machinery purchase price + Tax + Transportation cost +insurance…
Q: During the current year, Alanna Co. had the following transactions pertaining to its new office…
A: Answer A: So, Alanna Co. should record the land in the books for $126,000.
Q: Benedict Company incurred the following costs. 1. Sales tax on factory machinery purchased…
A: Note: For determining the acquisition costs of land, Please Re-submit the question with complete…
Q: capitalized amount of the equipment?
A: Meaning of Capitalized costs Capitalized costs includes all the fixed costs incurred in purchase of…
Q: A bookkeeper in error recorded the $60,000 purchase cost of a new machine as repairs and maintenance…
A: Correct profit figure = draft profit + repair and maintenance expense wrongly charged in P/L-…
Q: Screen Gem Movie Theater purchased a new projector for $155,000 with a salvage value of $2,000.…
A: Total cost of projector = Purchase cost + Delivery and installation cost = $155,000 + $580 =…
Q: During the year just ended, Morton Company made the following expenditures relating to its plant…
A: Any amount spent on repairs and maintenance that does not add/increase the value of the asset should…
Q: On January 1, 20x1, ABC Co. received 2,000,000 grant from the government to aid in the construction…
A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…
Q: Padre, Inc., purchased a used piece of heavy equipment for $25,000. Delivery of the equipmentto…
A: Annual depreciation refers to the amount of depreciation that is required to be charged on the value…
Q: On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $90,000 and…
A: Initial cost=Cash Payment+Short term note=$90,000+$50,000=$140,000
Q: COMPASSION Company incurred the following costs at the beginning of the current year: Cost of land…
A: Tangible assets can be defined as the asset that has a monetary value and has a physical form. These…
Q: COMPASSION Company incurred the following costs at the beginning of the current year: Cost of land…
A: According to the policy, we are supposed to solve one question at a time. Kindly repost the further…
Q: A robot for the manufacture of motor vehicles is purchased for $420,000. It has a class life of 10…
A: ANSWER ON NEXT SHEET
Q: Beaverton Lumber purchased milling equipment for $35,000. In addition to the purchase price,…
A: Particulars Amount Purchase cost $35,000 Add: Freight $1,500 Add: Installation $3,000…
Q: During the fiscal year, ABC Company incurred the following costs related to property, plant and…
A: based on the nature of expenditure we will divide the expenses into the land, land development,…
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 tractor acquired at a cost of $420,000 has an estimated residual value of $30,000, has an…
A: Unit-of-activity Method: Under this method of depreciation, the depreciation expense is calculated…
Q: Northwest Delivery Company acquired an adjacent lot to construct a new warehouse, paying $75,000 and…
A: Amount paid for the construction of new warehouse will not be part of the cost of the land.
Q: The General Service Contractor Company paid$400,000 for a house and lot. The value of the landwas…
A: Depreciation is reduction in value of asset due to usage and time.
Q: Beaverton Lumber purchased a milling machine for $35,000. In addition to the purchase price,…
A: Plant Assets: Plant assets refer to the fixed assets, having a useful life of more than a year that…
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: A new drill press was purchased for $95,000 by trading in a similar machine that had a book value of…
A: Answer - Step 1 - Calculation of Unrecognized Loss - Particulars Amount Book value of…
Q: On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $44,000 in…
A: Land forms a part of assets of the entity and represent the resources that assist the business in…
Q: Fastball Delivery Company acquired an adjacent lot to construct a new warehouse, paying $38,000 and…
A: Total cost of the land = Cash paid + Short term note + Legal fees + Delinquent taxes + Removal cost…
Q: A refrigerator used by a wholesale warehouse has a cost of $64,000, an estimated residual value of…
A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…
Q: A truck for hauling coal has an estimated net cost of $55,000 and is expected to give service for…
A: Depreciation: It is a non-cash expense. This is the decrease in the value of a fixed asset…
Q: Simons Company purchased land to build a new factory. The following expenditures were made in…
A: Plant asset:
Q: On January 6, Year 1, Mount Jackson Corporation purchased a tract of land for a factory site for…
A: The capitalization cost of land includes the cost of demolition of the building, real estate, and…
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…
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Immediately after a used truck is acquired, a new motor is installed at a total cost of $3,850. Is this a capital expenditure or a revenue expenditure?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Which of the following would be considered capital expenditures (debit to an asset)? Sales tax on the purchase of equipment Purchase of cleaning supplies to clean the company's microwave A special concrete foundation that was poured specifically for a new piece of equipment Installation costs for installing a new piece of equipment General maintenance costs for a piece of equipment that has been in service for ten years Routine oil change for a van Repair of damage incurred on a new piece of equipment while the new equipment was being brought into the company's office Attorney's fees incurred to review the purchase agreement for a new piece of equipment Installation of a parking lot around a retail buildling Freight costs for the delivery of a purchased used printing pressIdentify the following expenditures as capital expenditures or revenue expenditures. Immediately after acquiring a new delivery truck, paid$260 to have the name of the store and other advertising material painted on the vehicle. Painted delivery truck at a cost of $450 after two years of use. Purchased new battery at a c cost of $40 for two years old delivery truckIdentify which of the following expenditures is considered as a capital expenditure that must be capitalized (depreciated):(a) Purchase land to build a warehouse at $300,000.(b) Purchased a copy machine at $15,000.(c) Installed a conveyor system at a cost of $55,000 to automate some part of production processes.(d) Painted the office building, both interior and exterior, at a cost of $22,000.( e) Repaved the parking lot at a cost of $25,000.(f) Installed a purified water fountain in the employee lounge at a cost of$3,000.(g) Purchased a spare part for a stamping machine at a cost of $3,800.(h) Paid $12,000 to lease a dump truck for six months.(i) Purchased a patent on an energy-saving device over five years at a cost of $30,000.
- Addition of a sprinkler system to the manufactoring facility to reduce the risk of fire damage, $36,700 would be an expense in the period occured or would be capitalized and depreciated over the useful life of the asset?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 company purchased a track of land with the intent to use the land to put a new building. However, an old building is sitting where the new building is to be constructed, and the old building must be removed at a cost of $10,000. Should the cost of removing the old building be part of the cost of the building or be part of the cost of the land? Please explain:Indigo Architecture made the following cash expenditures during its first year in operations: 1. 2. 3. 4. 5. 6. 7. 8. 9. (a1) Cost of real estate purchased as a plant site (land and building) Accrued property taxes paid at the time of the purchase of the real estate Cost of demolishing building to make land suitable for construction of a new building Architect's fees on building plans Excavation costs for new building Cost of filling and grading the land Full payment to building contractor Cost of parking lots and driveways Property taxes paid for the current year on the land Your answer is partially correct. $133,900 3,300 10,600 14,700 26,900 2.300 752,600 32,800 8,200 Record the above transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)Concord Corporation incurs these expenditures in purchasing a truck: cash price $54,000, accident insurance (during use) $3,900, sales taxes $1,800, motor vehicle license $400, and painting and lettering $1,600. What is the cost of the truck? Cost of the truck $
- Record the following events of Mental Health Clinic, a VHWO:1. A contribution of $20,000 was received and is to be used for the purchase of equipment, but not until an addition to the building is constructed. Construction has begun on the building.2. Equipment costing $17,000, with a book value of $8,000, was sold for $10,000. The gain is unrestricted.3. Depreciation of $9,000 is recorded on various plant items.4. Equipment was purchased for $18,000, with payment due in 30 days from donor-restricted resources. Mental Health Clinic elects to release the donor restriction upon acquisition of the equipment.5. The liability for the equipment purchased in item (4) was paid.Indicate which of the following costs should be expensed when incurred. a. $13,000 paid to rearrange and reinstall machinery. b. $200,000 paid for addition to building. c. $200 paid for tune-up and oil change on delivery truck. d. $7,000 paid to replace a wooden floor with a concrete floor. e. $2,000 paid for a major overhaul on a truck, which extends the useful life.For each of the following items, indicate if it is a Capital Expenditures (CE) or Revenue Expenditure (RE). 1. Constructed an addition to an existing building. 2. Repainted the president’s office. 3. Paid cash for improvements that will increase the number of products that the machine can produce per hour. 4. Replaced the tires on a company delivery vehicle. 5. Replaced a component of a machine that will increase the economic life of that machine.