The cost of manufacturing equipment would include all of the following except: purchase price reduced by any discount taken. freight costs. installation costs. cost of training the equipment operator.
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The amount recorded for merchandise inventory includes all of the following except Purchase discounts. Returns and allowances. Freight costs paid by the buyer. Freight costs paid by the seller. Trade discounts.
Crystal W.
"The following data relate to a firm's purchase of a machine used in the manufacture of its product: Invoice price $20,000 Applicable sales tax 1,200 Cash discount taken for prompt payment 400 Freight paid 260 Cost of insurance coverage on machine while in transit 125 Installation costs ,000 Testing and adjusting costs 475 Repair of damages to machine caused by the firm's employees 550 Prepaid maintenance contract for first year of machines use 300 Determine the acquisition cost of the machine 23,510"
Aya Bianca I.
A capital acquisitions manager recently purchased equipment needed to begin production of new inventory. The listed purchase cost of the equipment from a vendor was $70,000. In addition, six other costs related to the equipment were incurred at the time of acquisition and in the first month of operations. These six related costs are displayed in the illustration: Purchase Cost: $70,000 1. Sales Tax: $5,600 2. Shipping and Handling: $6,200 3. Installation and Preparation: $12,700 4. Testing and Safety Inspection: $8,400 5. Employee Training for Operations: $5,500 6. Maintenance for First Month of Operations: $1,600 Total: $110,000 Required: 1. Which costs represent normal costs that are necessary to get the asset in condition and location for its intended use? 2. Which costs typically would be related to operating the equipment once it's in use? 3. Record the summary entry for the $110,000 of expenditures related to the equipment (Assume all costs were paid in cash. Employee training is incurred through salary costs.)
Jerelyn N.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
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