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Name: During 2006, Fox company made the following expenditures relating to p
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Description: During 2006, Fox company made the following expenditures relating to plant machinery and equipment. Renovation of a group of machines at a cost of $50,000 to secure greater efficiency in production over their remaining 5- year useful lives. The proje

Business

Accounting

total amount should be charged to repairs and maintenance

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4PA: During the current year, Arkells Inc. made the following expenditures relating to plant machinery. ...

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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?
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?
Belltone Company made the following expenditures related to its 10-year-old manufacturing facility: The heating system was replaced at a cost of $230,000. The cost of the old system was not known. The company accounts for improvements as reductions of accumulated depreciation. A new wing was added at a cost of $830,000. The new wing substantially increases the productive capacity of the plant. Annual building maintenance was performed at a cost of $20,500. All of the equipment on the assembly line in the plant was rearranged at a cost of $52,000. The rearrangement clearly increases the productive capacity of the plant. Required:Prepare journal entries to record each of the above expenditures
Belltone Company made the following expenditures related to its 10-year-old manufacturing facility: 1. The heating system was replaced at a cost of $250,000. The cost of the old system was not known. The company accounts for improvements as reductions of accumulated depreciation. 2. A new wing was added at a cost of $750,000. The new wing substantially increases the productive capacity of the plant. 3. Annual building maintenance was performed at a cost of $14,000. 4. All of the equipment on the assembly line in the plant was rearranged at a cost of $50,000. The rearrangement clearly increases the productive capacity of the plant. Required: Prepare journal entries to record each of the above expenditures.
Belltone Company made the following expenditures related to its 10-year-old manufacturing building: The heating system was replaced at a cost of $245,000. The cost of the old system was not known. The company accounts for improvements as reductions of accumulated depreciation. A new wing was added at a cost of $860,000. The new wing substantially increases the productive capacity of the building. Annual building maintenance was performed at a cost of $23,500. All of the equipment on the assembly line in the building was rearranged at a cost of $58,000. The rearrangement clearly increases the productive capacity of the equipment. Required: Prepare journal entries to record each of the above expenditures. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
On September 10, 2018, Harry Co. incurred the following costs for one of its printing presses:Purchase of attachment $65,000Installation of attachment 5,000Replacement parts for renovation of press 18,000Labor and overhead in connection with renovation of press 7,000Neither the attachment nor the renovation increased the estimated useful life of the press. However, the renovation resulted in significantly increased productivity. What amount of the costs should be capitalized?a. $0.b. $77,000.c. $88,000.d. $95,000.
Oki Company pays $310,150 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment. 1. Paid $23,700 cash for a new component that increased the equipment's productivity. 2. Paid $5,925 cash for minor repairs necessary to keep the equipment working well. 3. Paid $16,650 cash for significant repairs to increase the useful life of the equipment from four to seven years.
During the current fiscal year, a company made the following expenditures: -Spent $50,630 to overhaul a machine. The overhaul enabled the machine to produce more products per hour than it previously had produced. -Spent $7,511 to replace a defective compressor. The new compressor had no impact on the useful life, efficiency, or productivity of the machine on which it is a component. -Spent a total of $39,551 on a series of low cost repairs. How much should the company capitalize?
A company purchased a special purpose machine on August 1st of the previous year. It was installed and ready to run on January 1st of the current year. The following costs were incurred in the purchase and installation of the machine: Invoice price $1,200,000 Freight costs 6,000 Installation costs 64,000 Electrical and power connections 32,000 Repairs to correct damage during uncrating 12,000 Costs to adjust machine to appropriate specifications 56,000 Costs of spare parts for future use 108,000 Sales tax 70,500 Cost of…
Betterment versus Maintenance Expenditures During the year, Graham International made the following expenditures relating to plant, machinery, and equipment: Completed regularly scheduled repairs at a cost of $300,000. Overhauled several stamping machines at a cost of $550,000 to improve production efficiency. Replaced a broken cooling pump on a 100-ton press at a cost of $30,000. Required Identify which expenditures should be expensed as a maintenance expense or capitalized as a betterment outlay. Total amount charged as maintenance expense for the year: $Answer Total amount charged as betterment outlays for the year: $Answer
el Salalak Company incurred the following plant asset expenditures and receipts in its first year of operations. The purchase price of the land was RO 285,000. The cost of filling the land was RO 15,000. Cost of demolishing an old building on the land to make land suitable for construction of new factory RO 10,000. Proceeds from salvage of the materials from the old building totalled RO 4,000. Full payment to factory construction contractor RO 300,000. Real estate taxes on land paid at time of purchase RO 4,500. Architect's fees on factory design plans RO8,500. Cost of the fences, parking lots and driveways RO 30,000. What is the total cost of the factory building? Moh O a. RO 314,000 12 O b. None of the options are correct Oc RO 310,500 O d. RO 308,500 10 O e. RO 306,000
On January 1, 20x2, Kent Corporation purchased a machine for $50,000. Kent paid shopping expenses of $500 as well as installation costs of $1,200. The machine was estimated to have a useful life of 10 years and estimated salvage value of $3,000. In January 20x3, additions costing $3,600 were made to the machine in order to comply with pollution control ordinances. These additions neither prolonged the life of the machine nor did they have any salvage value. If Kent records depreciation under the straight-line method, depreciation expense for 20x3 is a.$4,870 b.$5,170 c.$5,270 d.$5,570