Capital University recently purchased new computing equipment for its business school on March 1, 2020. Use...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Capital University recently purchased new computing equipment for its business school on March 1, 2020. Use the following information to determine dollar amount that Capital will record as the total cost of this equipment: 1. The list price of the equipment was $350,000; however, Capital University qualified for a "trade discount" of $50,000. It paid $50,000 cash for the equipment, and issued a 120 day, 10 percent note payable for the remaining balance. The note, plus accrued interest charges of $7,000, was paid at the maturity date. 2. In addition to the amounts described in 1, Capital paid sales taxes of $25,000 at the date of purchase. 3. Freight charges for delivery of the equipment totaled $12,000. 4. Installation costs related to the equipment amounted to $17,000. 5. During installation, one of the computer terminals was accidentally damaged by a Capital employee. It cost the college $1,000 to repair this damage. 6. As soon as the computers were installed, Capital paid $4,000 to print recruiting brochures featuring the new, state-of-the-art computing facilities in the business school. Required: Compute the total cost that will be recorded in Capital's Computing Equipment account. Part 2 (7 points) Lynbrook purchased a tooling machine to use for the manufacturing of its new products on March 5, 2020. You have been asked to determine how much depreciation expense would be recognized under two different methods. The equipment cost $110,000 and is expected to have a value of $20,000 at the end of its five-year life. Required: a) Determine the amount of depreciation expense that will be recognized under each of the following depreciation methods in 2020 and 2021, the first and second years of the equipment's useful life. Lynbrook has a policy to use the partial-years method of depreciation. (round to nearest dollar, if needed): 1. Straight-line. 2. Double-declining-balance. b) Prepare the Property Plant & Equipment (PPE) section of the balance sheet at the end of the 2021 under the double-declining-balance method, assuming the equipment is the only plant asset owned by Lynbrook. c) Lynbrook sold the equipment on September 2, 2022 for $15,000. Prepare the entry to record the depreciation expense incurred in 2022 and the entry to record the sale of the equipment, using the straight-line method of depreciation. Capital University recently purchased new computing equipment for its business school on March 1, 2020. Use the following information to determine dollar amount that Capital will record as the total cost of this equipment: 1. The list price of the equipment was $350,000; however, Capital University qualified for a "trade discount" of $50,000. It paid $50,000 cash for the equipment, and issued a 120 day, 10 percent note payable for the remaining balance. The note, plus accrued interest charges of $7,000, was paid at the maturity date. 2. In addition to the amounts described in 1, Capital paid sales taxes of $25,000 at the date of purchase. 3. Freight charges for delivery of the equipment totaled $12,000. 4. Installation costs related to the equipment amounted to $17,000. 5. During installation, one of the computer terminals was accidentally damaged by a Capital employee. It cost the college $1,000 to repair this damage. 6. As soon as the computers were installed, Capital paid $4,000 to print recruiting brochures featuring the new, state-of-the-art computing facilities in the business school. Required: Compute the total cost that will be recorded in Capital's Computing Equipment account. Part 2 (7 points) Lynbrook purchased a tooling machine to use for the manufacturing of its new products on March 5, 2020. You have been asked to determine how much depreciation expense would be recognized under two different methods. The equipment cost $110,000 and is expected to have a value of $20,000 at the end of its five-year life. Required: a) Determine the amount of depreciation expense that will be recognized under each of the following depreciation methods in 2020 and 2021, the first and second years of the equipment's useful life. Lynbrook has a policy to use the partial-years method of depreciation. (round to nearest dollar, if needed): 1. Straight-line. 2. Double-declining-balance. b) Prepare the Property Plant & Equipment (PPE) section of the balance sheet at the end of the 2021 under the double-declining-balance method, assuming the equipment is the only plant asset owned by Lynbrook. c) Lynbrook sold the equipment on September 2, 2022 for $15,000. Prepare the entry to record the depreciation expense incurred in 2022 and the entry to record the sale of the equipment, using the straight-line method of depreciation.
Expert Answer:
Answer rating: 100% (QA)
Total cost that will recorded in Capitals Computing Equipment account 354000 List pric... View the full answer
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Posted Date:
Students also viewed these accounting questions
-
Capital University recently purchased new computing equipment for its business school on March 1, 2020. Use the following information to determine dollar amount that Capital will record as the total...
-
Wilmet College recently purchased new computing equipment for its library. The following information refers to the purchase and installation of this equipment: 1. The list price of the equipment was...
-
Hamlet College recently purchased new computing equipment for its library. The following information refers to the purchase and installation of this equipment: 1. The list price of the equipment was...
-
On May 1, Johnson Corporation purchased inventory for $40,000 on credit. On May 15, Johnson sold inventory with a cost of $10,000 for $25,000 on credit. Prepare journal entries to record these...
-
In a recent year's financial statements, Procter & Gamble showed an unfunded pension liability of $4,267 million and a periodic pension cost of $538 million. Explain the meaning of the $4,267 million...
-
Use the principle of least squares to write the expression you would use to fit a curve of the form Y = aX2 + b. One easy way to solve this is to think of a new measurement Z = X2 and find the linear...
-
Discuss the uses and limitations of the statement of financial position for decision-making purposes.
-
Sandblasting equipment acquired at a cost of $42,000 has an estimated residual value of $6,000 and an estimated useful life of 10 years. It was placed in service on October 1 of the current fiscal...
-
Consider a cantilevered, rectangular beam subjected to a load pro- duced by a 1 kg point mass at the (free) tip of the beam. Assume that beam material is made of Aluminum and that the beam is 11 in....
-
The map below shows the countries of Belize (B), Costa Rica (C), El Salvador (E), Guatemala (G), Honduras (H), Nicaragua (N), and Panama (P). Represent the map as a graph where each vertex represents...
-
Calculate the PV of the following information and show the calculation in the cell: a. X = $92,903 b. N = 9 years c. r = 8.63% Based on the above information above , what is the FV and show the...
-
In this usury case under Texas law, Plaintiff-Appellant Achee Holdings, LLC (Achee) appeals the district courts order granting the Federal Rules of Civil Procedure 12(b)(6) motion to dismiss filed by...
-
A source supplies power to the following three loads connected in parallel: (1) a lighting load drawing \(10 \mathrm{~kW}\), (2) an induction motor drawing \(10 \mathrm{kVA}\) at 0.90 power factor...
-
An industrial plant consisting primarily of induction motor loads absorbs \(500 \mathrm{~kW}\) at 0.6 power factor lagging. (a) Compute the required \(\mathrm{kVA}\) rating of a shunt capacitor to...
-
An estate with distributable net income of $100,000 distributes the following assets to a beneficiary in December of 2019: a. What is the beneficiary's basis in the distributed assets? b. What would...
-
In order to avoid difficulties with third-harmonic exciting current, which three-phase transformer connection is seldom used for step-up transformers between a generator and a transmission line in...
-
6. (10 pts.) Assume you are the manager of Faygo (Michigan's own soft drink!), where the monthly demand for Faygo at the local gas station is QD-600-800P and the supply function (including sales tax)...
-
When you weigh yourself on good old terra firma (solid ground), your weight is 142 lb. In an elevator your apparent weight is 121 lb. What are the direction and magnitude of the elevator's...
-
Discuss the potential benefits associated with using activity-based costing.
-
Sky Probe sells state-of-the-art telescopes to individuals and organizations interested in studying the solar system. At December 31 last year, the companys inventory amounted to $250,000. During the...
-
Why is the combination of direct labor and manufacturing overhead referred to as a conversion cost?
-
The post-closing trial balance for Cortez Co. is as follows. The subsidiary ledgers contain the following information: (1) accounts receivable J. Anders \($2,500,\) E Cone \($7,500,\) T. Dudley...
-
Presented below are the purchases and cash oe journals for Reyes Co. for its first month of operations. In addition, the following transactions have not been journalized for July. The cost of all...
-
Presented below are the sales and cash receipts journals for Wyrick Co. for its first month of operations. In addition, the following transactions have not been journalized for February 2008....
Study smarter with the SolutionInn App