Fogelberg Company purchased equipment for $30,000. The sales tax on the purchase was $1,500....
Question:
Fogelberg Company purchased equipment for $30,000. The sales tax on the purchase was $1,500. Other costs incurred were freight charges of $400, repairs of $700 for damage during installation, and installation costs of $450.
What is the cost of the equipment?
Installation cost:
A company's expense in putting the equipment to use is known as an installation cost. This cost is added to the equipment's purchase price when determining the machinery's overall cost.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerGiven information:
- The Purchase cost of equipment = $ 30,000.
- Sales tax on purchase = $1,500.
- Freight charges = $400.
- Repairs during installation...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
How to Record Asset Acquisition, Disposal & Impairment in Accounting
from
Chapter 11 / Lesson 2
19K
Accountants must clearly record the acquisition, disposal, and impairment of a company's or individual's assets. Review these accounting concepts specific to assets, including acquisition, basket purchases, retirement, disposal, and impairment.
Related to this Question
- Samantha Company purchased equipment for $36,000. Sales tax on the purchase was $2,400. Other costs incurred were freight charges of $600, repairs of $350 for damage during installation, and installation costs of $675. What is the cost of the equipm
- Samantha Company purchased equipment for $36,000. Sales tax on the purchase was $2,400. Other costs incurred were freight charges of $600, repairs of $350 for damage during installation, and installation costs of $675. What is the cost of the equipment?
- Tyson Chandler Company purchased equipment for $10,000. Sales tax on the purchase was $500. Other costs incurred were freight charges of $200, repairs of $350 for damage during installation, and installation costs of $225. What is the cost of the equipmen
- Worthington Chandler Company purchased equipment for $10,000. Sales tax on the purchase was $500. Other costs incurred were freight charges of $200, repairs of $350 for damage during installation, and installation costs of $225. What is the cost of the eq
- On March 1, Wright Company purchased new equipment for $75,000 by paying cash. Other costs associated with the equipment included transportation costs of $1,500, sales tax paid of $6,000, and an installation cost of $2,800. At what amount will the equipme
- On March 1, Wright Company purchased new equipment for $52,000 by paying cash. Other costs associated with the equipment were: transportation costs, $1,400; sales tax paid $3,400; and installation cos
- Helmway Company purchased equipment and these costs were incurred: Cash price $21,500 Sales taxes $1,800 Insurance during transit $320 Installation and testing $430 Total costs $24,050 They will record the acquisition cost of the equipment as: a. $21,500
- Stories Company purchased equipment and these costs were incurred: Cash price $22,500 Sales taxes 1,800 Insurance during transit 320 Installation and testing 430 Total costs $25,050 Stories will record the acquisition cost of the equipment as: a) $22,500
- Corrieten Company purchased equipment and incurred these costs: Cash price = $24,000 Sales taxes =1,200 Insurance during transit = 200 Installation and testing =400 Total costs = $25,800 What amount should be recorded as the cost of the equipment?
- Wiley Company purchased new equipment for $60,000. Wiley paid cash for the equipment. Other costs associated with the equipment included transportation costs of $1,000, sales tax of $3,000, and installation costs of $2,500. What is the cost recorded for t
- Wiley Company purchased new equipment for $50,000. Wiley paid cash for the equipment. Other costs associated with the equipment included transportation costs of $2,600, sales tax of $3,500, and installation costs of $3,000. What is the cost recorded for t
- Smith company purchases equipment for a contract price of $300,000 with terms of 2/10 n 30. They incur sales tax of $18,000 transportation costs of $5,000 and installation costs of $15,000 and uninsured damages of $7,000. Prepare the entry assuming the c
- The cost at which a company records purchases of machinery and equipment should include which of the following? a. Shipping fees b. Installation c. Taxes d. Purchase price
- Wiley Company purchased new equipment for $54,000. Wiley paid cash for the equipment. Other costs associated with the equipment were: transportation costs, $2,600; sales tax paid $3,200; and installation cost, $2,700. The cost recorded for the equipment w
- Which one of the following costs will not be included in the cost of the equipment? a. Installation costs b. Delivery fees c. Maintenance costs d. Sales taxes associated with buying the equipment e. Assembly costs
- Oriole Company purchased equipment and these costs were incurred: Cash price $82,000 Sales taxes 3,400 Insurance during transit 770 Installation and testing 840 Total costs $87,010 Oriole will record the acquisition cost of the equipment as: a. $82,000. b
- Crane Company purchased equipment and these costs were incurred: Cash price $65,000 Sales taxes 4,100 Insurance during transit 700 Installation and testing 950 Total costs $70,750 Crane will record the acquisition cost of the equipment as: A) $65,000. B
- The following expenditures relate to machinery purchased by Godfrey Manufacturing: | Purchase price | $16,000 | Transportation costs | 800 | Installation | 500 | Repair of part broken during installation | 300 | Sales Tax | 1,000 What amount should Godf
- You acquired a piece of machinery costing $36,330. Freight charges incurred were $4,766 and you had to spend $5,768 to install the machine, but while the machine was being installed a part of it was damaged and you paid $390 to have it repaired. At what a
- Oriole Company purchased equipment and these costs were incurred: Cash price $68000 Sales taxes 4600 Insurance during transit 690 Installation and testing 900 Total costs $74190 Oriole will record the acquisition cost of the equipment as: a. $68000. b.
- Circle Co. purchased a piece of equipment by paying $10,000 cash. There was shipping cost of $1,200 and a renovation cost of $3,200 to the building to get the space ready for the installation. There w
- Which of the following costs related to the purchase of production equipment incurred by SAB Company during 2009 would be considered a revenue expenditure? a. Installation costs for equipment. b. Purchase price of the equipment less the cash discount.
- Jungle Land purchased factory equipment with an invoice price of 70,000 on 6/30/2015. other costs incurred were freight costs 1800, installation wiring and foundation 2500, material and labor costs in installing equipment 500, fire insurance policy coveri
- All of the following are included in the acquisition cost of property, plant, and equipment except: a. transportation costs. b. taxes on the purchase. c. installation costs. d. maintenance costs.
- A used machine with a purchase price of $42,187, requiring an overhaul costing $9,990, installation costs of $6,271, and special acquisition fees of $12,007, would have a cost basis of: a. $42,187 b. $70,455 c. $52,177 d. $98,723
- A used machine with a purchase price of $34,953.00, requiring an overhaul costing $8,995.00, installation costs of $4,621.00, and special acquisition fees of $29,424.00. would have a cost basis of: - $43,948.00 - $34,953.00 - $77,993.00 - $121,033.00
- A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis of: a) $93,000 b)
- A used machine with a purchase price of $31,850.00, requiring an overhaul costing $8,619.00, installation costs of $6,966.00, and special acquisition fees of $13,594.00, would have a cost basis of A) $31,850.00 B) $61,029.00 C) $40,469.00 D) $90,208.0
- John company purchases equipment for a contract price of $300,000 with terms of 2/10 n 30. They incur a sales tax of $18,000 transportation costs of $5,000 and installation costs of $15,000 and uninsu
- The following costs were incurred by Shumway Company in purchasing land: Cash price $84,000 Removal of the old building $5,200 Legal fees $3,000 Clearing and grading $3,500 Installation of a fence $3,
- Jubilee Corporation is considering the purchase of a new machine costing 100000. Sales tax on the machine is 6%. Freight costs to have the machine delivered will be $1000. Installation and setup costs
- The following expenditures were incurred to buy a new machine: Invoice, $32,000 less 8% cash discount. Freight charges, $460. Assembly charges, $1,000. Special base to support machine, $501. Machine dropped and repaired $320. What is the actual cost
- These expenditures were incurred by Shumway Ltd. in purchasing land: cash price $54,820; legal fees $2,210; removal of old building $5,170; the cost of clearing and grading $4,430; installation of fen
- A new machine with a purchase price of $93,400, with transportation costs of $9,941, installation costs of $6,155, and special acquisition fees of $2,585, would have a cost basis of: A. $102,140 B. $112,081 C. $99,555 D. $93,400
- A new machine with a purchase price of $96,444, with transportation costs of $7,471, installation costs of $5,445, and special acquisition fees of $2,991, would have a cost basis of: a. $112,351 b. $101,889 c. $96,444 d. $104,880
- Presto Company purchased equipment and these costs were incurred: Cash price: $27,500 Sales taxes: $1,800 Insurance during transit: $320 Installation and testing: $430 Total costs $30,050 How will Presto record the acquisition cost of the equipment?
- Equipment was purchased for $158,500. Freight charges amounted to $4,500, and there was a cost of $14,000 for building a foundation and installing the equipment. It is estimated that the equipment wil
- When a company purchases land with a building on it and immediately tears down the building so that the land can be used for the construction of a plant, the costs incurred to tear down the building should be: a. Expensed as incurred. b. Added to the cost
- A company purchased property for a building site. The costs associated with the property are given below. Purchase price = $175,000 Real estate commissions = $15,000 Legal fees = $800 Expenses of clearing the land = $2,000 Expenses to remove old building
- Which of the following would not be considered part of the cost of equipment recently purchased? A. Sales tax B. Transportation charges C. Installation and setup charges D. All three are capitalized c
- Woodward Company purchased a new piece of equipment to use in its business. The details of the purchase and related costs are as follows: 1. Purchase price of equipment $70,000 2. Installation of equipment $6,000 3. Freight costs (FOB shipping po
- As part of the initial outlays to get the ABC Company up & running, they needed to purchase S625,000 in equipment. It also cost $12,356 for delivery of the equipment and $62,644 in installation costs.
- Erin Danielle Company purchased equipment and incurred the following costs. Cash price $24,000 Sales taxes 1,200 Insurance during transit 200 Installation and testing 600 Total costs $25,800 What amount should be recorded as the cost of the equipment? a)
- In January 2014, installation costs of $5,900 on new machinery were charged to Maintenance and Repairs Expense. Other costs of this machinery of $29,500 were correctly recorded and have been depreciat
- Which of the following is NOT a part of the acquisition cost of an equipment purchase? a. Transportation costs to deliver the equipment b. Installation costs to set up and test the equipment c. Sales tax on the purchase Interest cost on the loan to financ
- Blossom Company purchased equipment and these costs were incurred. Blossom will record the acquisition cost of the equipment as
- If a company incurs a cost for a part that is needed to repair a piece of equipment, is this cost classified as an asset or an expense? Explain.
- The Collins Corporation purchased office equipment at the beginning of 2014 and capitalized a cost of $2,270,000. This cost included the following expenditures: Purchase price $2,030,000 Freight charges 48,000 Installation charges 38,000 Annual maintenanc
- Strike Bowling installs automatic scorekeeping equipment with an invoice cost of $180,000. The electrical work required for the installation costs $8,000. Additional costs are $3,000 for delivery and $12,600 for sales tax. During the installation, a compo
- Major Manufacturing purchased a machine with a contract price of $400,000 and cash terms of 2/10, n/30, on August 28, 2009. The company paid $8,000 in transportation costs and $8,000 for installation. Sales taxes of $22,000 were paid in invoice amount. Th
- A new machine with a purchase price of $109,000, with transportation costs of $12,000, installation costs of $5,000, and special acquisition fees of $6,000, would have a cost basis of: a. $121,000 b.
- Mount Company purchased a machine at an invoice cost of $21,000 subject to terms of 3/10, n/30. The discount was taken. It also had to pay $1200 for installation and $370 for insurance on the machine after it was in operation. What is the total cost to be
- Ahlia Corporation incurred the following costs while manufacturing its product. Materials used in product $120,000 Advertising expense $45,000 Depreciation on plant 60,000 Property taxes on plant 19,000 Property taxes on store 7,500 Delivery expense 21,00
- A company vehicle's battery is replaced. The cost should be charged to the __________ account. A. Equipment B. Property, Plant, and Equipment C. Repairs and maintenance expense D. Vehicles
- Fraser Manufacturing purchased land next to its factory to be used as a parking lot. The following expenditures were incurred by the company: Purchase price $299,000 Broker's fees $24,900 Title search and other fees $2,200 Demolition of a cottage on the p
- Equipment was purchased for $200,000. Freight charges amounted to $10,000 and there was a cost of $15,000 for building a foundation and installing the equipment. It is estimated that the equipment wil
- Your company is contemplating the purchase of a large stamping machine. The machine will cost $180,000. With additional transportation and installation costs of $5,000 and $10,000, respectively, the
- A company paid $519,000 to purchase equipment and $16,900 to have the equipment delivered to and installed in the company's production facilities. The equipment is expected to be used a total of 29,90
- Chong Lai Company acquired a new machine in order to expand its productive capacity. The costs associated with the machine purchase were as follows: Purchase price $10,000 Installation costs 500 Cost of initial testing 600 Sales tax 750 1. Make th
- A company incurred the following costs for a new delivery truck: Purchase price $130,000 Sales tax $7,300 Delivery charge from seller's location $1,500 Special racks for storage $3,000 Normal repairs to the truck before it was used for the first time $1,1
- A company incurs a cost for a part, which is needed to repair a piece of equipment. Is the cost an asset, or an expense? Explain.
- Aurora Company is considering the purchase of a new machine. The invoice price of the machine is $165,000, freight charges are estimated to be $5,000, and installation costs are expected to be $7,000.
- 1. If the merchandise costs $4,000, insurance in transit costs $200, tariff costs $50, processing the purchase order by the purchasing department costs $35, and the company receiving dock personnel co
- Which of the following expenditures would not be capitalized as part of the cost of purchasing a piece of equipment? a. Transportation costs to get the new equipment to the buyer's factory. b. The cost to train employees to maintain the new equipment. c.
- Grab Manufacturing Co. purchased a 10-ton draw press at a cost of $179,000 with terms of 3/15, n/45. Payment was made within the discount period. Shipping costs were $4,200, which included $390 for insurance in transit. Installation costs totaled $12,200
- Grab Manufacturing Co. purchased a 10-ton draw press at a cost of $180,000 with terms of 5/15, n/45. Payment was made within the discount period. Shipping costs were $4,600, which included $200 for insurance in transit. Installation costs totaled $12,000,
- Grab Manufacturing Co. purchased a ten-ton draw press at a cost of $178,000 with terms of 2/15, n/45. Payment was made within the discount period. Shipping costs were $4,000, which included $250 for insurance in transit. Installation costs totaled $11,800
- Peterkin Company incurred the following costs while manufacturing its product. Materials used in product $125,000 Advertising expense $45,000 Depreciation on plant $60,000 Property taxes on plant $19,000 Property taxes on store $7,500 Delivery expense $21
- An item of property, plant, and equipment costs $200,000; 30% of this cost is attributable to land, and the other 70% is attributable to a building. If the building has a salvage value of $20,000, what is the depreciable base? A $120,000 B $140,000 C $
- Kegler Bowling installs automatic scorekeeping equipment with an invoice cost of $185,000. The electrical work required for the installation costs $19,425. Additional costs are $3,885 for delivery and $13,330 for sales tax. During the installation, a comp
- Kegler Bowling installs automatic scorekeeping equipment with an invoice cost of $190,000. The electrical work required for the installation costs $20,000. Additional costs are $4,000 for delivery and $13,700 for sales tax. During the installation, a comp
- What would be the cost basis for a used machine with a purchase price of $34,953.00, requiring an overhaul costing $8,995.00, installation costs of $4,621.00, and special acquisition fees of $29,424.0
- A company paid $503,000 to purchase equipment and $15,300 to have the equipment delivered to and installed in the company's production facilities. The equipment is expected to be used a total of 28,30
- A new machine with a purchase price of $84,143.00, with transportation costs of $7,632.00, installation costs of $5,105.00, and special acquisition fees of $2,525.00. Calculate a cost basis.
- Kevin purchases equipment from Ray Company for a price of $5,000,000 and chooses Bob to do the installation. Bob doesn't charge for the installation of equipment. The price of the installation service is estimated to have a fair value of $60,000. Assumin
- Which of the following would not be included in the cost of purchased equipment? a. Taxes paid on the equipment b. Shipping costs to have equipment delivered c. Insurance premiums for the next month of use d. Installation costs of equipment
- The price of a large piece of construction equipment purchased by Hass Construction Company was $53,500. It cost $1,275 for delivery and $2,750 for installation. The salvage value at the end of a 4-ye
- The Daisy Company paid $10,500 to acquire a 100 ton press. Freight charges to deliver the equipment amounted to $1,500 and were paid by Daisy. Installation costs amounted to $570, and machine testing charges amounted to $250. What amount should be capita
- Major Company purchased equipment to be used in its distribution center. All of the following should be included in the cost of the equipment EXCEPT? A. insurance costs after the equipment is up and running. B. wages of workers who test the equipment be
- Which of the following would not be considered part of the cost of machinery and equipment? a. In-transit insurance costs b. Delivery charges c. Installation costs d. Repairs and maintenance after start-up
- Jordash Company purchased Machine #573 on May 1, 2015. The following information relating to Machine #573 was gathered at the end of May. Price $36,750 Credit terms 2/10, n/30 Freight-in costs $ 485 Preparation and installation costs $1,900 Labor costs d
- If the merchandise costs $5,000, insurance in transit costs $250, tariff costs $75, processing the purchase order by the purchasing department costs $25, and the company receiving dock personnel costs $20, what is the total cost charged to the merchandise
- Teel, Inc. bought a new forklift and incurred the following costs in association with the purchase: Purchase price: $25,000 State sales tax: $2,100 Delivery fees: $350 Liability insurance for year 1: $1,200 At what value will the forklift be reported on T
- Which of the following costs would be excluded from the acquisition cost of equipment purchased from a supplier? a. The cost to widen an entrance in the building to bring the equipment into the facilities. b. Cost to install the equipment. c. A purchas
- A new machine with a purchase price of $90,000, transportation costs of $8,000, installation costs of $6,000, and special handling fees of $2,000, would have a cost basis of: a. $106,000 b. $110,000 c. $108,000 d. $102,000
- Bybee Corporation acquired real estate that contained land, building and equipment. The property cost Bybee $950,000. Bybee paid $175,000 and issued a note payable for the remainder of the cost. An ap
- A company paid $510,000 to purchase equipment and $16,000 to have the equipment delivered to and installed in the company's production facilities. The equipment is expected to be used a total of 29,00
- A company paid $500,000 to purchase equipment and $15,000 to have the equipment delivered to and installed in the company's production facilities. The equipment is expected to be used a total of 28,00
- On 1/1/18, Titan Corporation acquired new warehouse equipment at a cost of $70,000. Titan also paid a sales tax of $5,000 and installation/delivery costs of $25,000 related to this equipment. As of 7/31/20, Titan has deducted $20,000 in depreciation and $
- Freight costs paid on the purchase of new equipment. Are classified as: A. Buildings B. Machinery and Equipment C. Land D. Land Improvements
- Granite Company purchased a machine costing $140,000, terms 3/10, n/30. The machine was shipped FOB shipping point and freight charges were $4,000. The machine requires special mounting and wiring costing $12,000. When installing the machine, $3,500 in da
- A company purchases a remote building site for computer operations. The building will be suitable for operations after some expenditures. The wiring must be replaced to computer specifications. The roof is leaky and must be replaced. All rooms must be rep
- Once the equipment has been installed and placed in operation, subsequent expenditures relating to this equipment are frequently thought of as repairs or general maintenance and, hence, chargeable to operations in the period in which the expenditure is ma
- Repair bills for large machinery may include a flat fee for the visit to the company's premises plus additional labor charges per hour of repair work and various costs of replacement parts needed. What type of cost is the repair? a. Variable cost b. Sel
- Adama Company incurred the following costs. |1. Sales tax on factory machinery purchased | $5,000 |2. Painting of and lettering on truck immediately upon purchase |700 |3. Installation and testing of factory machinery |2,000 |4. Real estate broker's comm
- Somerset Company acquired a piece of equipment with a list price of $200,000 for $180,000. Freight to Somerset's location was $5,000. Installation and testing costs were $8,500. An old piece of equipment was scrapped as a result of this new purchase. The
- Somerset Company acquired a piece of equipment with a list price of $200,000 for $158,000. Freight to Somerset's location was $7,000. Installation and testing costs were $9,500. An old piece of equipment was scrapped as a result of this new purchase. The
- Somerset Company acquired a piece of equipment with a list price of $200,000 for $186,000. Freight to Somerset's location was $5,000. Installation and testing costs were $8,500. An old piece of equipment was scrapped as a result of this new purchase. The
- Somerset Company acquired a piece of equipment with a list price of $200,000 for $166,000. Freight to Somerset's location was $10,000. Installation and testing costs were $10,500. An old piece of equipment was scrapped as a result of this new purchase. Th
- Somerset Company acquired a piece of equipment with a list price of $200,000 for $188,000. Freight to Somerset's location was $9,000. Installation and testing costs were $6,500. An old piece of equipment was scrapped as a result of this new purchase. The
Explore our homework questions and answers library
Browse
by subject