Oriole Enterprises purchased equipment on March 15, 2018, for $68,620. The company also paid the following...

Oriole Enterprises purchased equipment on March 15, 2018, for $68,620. The company also paid the following amounts: $500 for freight charges; $193 for insurance while the equipment was in transit; $1,828 for a one-year insurance policy; $2,127 to train employees to use the new equipment; and $2,527 for testing and installation. The equipment was ready for use on April 1, but the company did not start using it until May 1.

Oriole has estimated the equipment will have a 10-year useful life with no residual value. It expects to consume the equipment’s future economic benefits evenly over the useful life. The company has a December 31 year end.

(a)

Calculate the cost of the equipment.

Cost of the equipment

2)The transactions that follow are expenditures related to property, plant, and equipment:

For each of the transactions, indicate the title of the account that you think should be debited in recording the transaction.

1.	Operator controls on equipment were replaced for $7,100, because the original control devices were not adequate.	VehiclesEquipmentRepair and Maintenance ExpenseLand ImprovementsBuildings
2.	A total of $4,372 was spent for decorative landscaping (planting flowers and shrubs, etc.).	BuildingsLand ImprovementsVehiclesEquipmentRepair and Maintenance Expense
3.	A new air conditioning system for the office was purchased for $16,690.	VehiclesBuildingsLand ImprovementsEquipmentRepair and Maintenance Expense
4.	Windows broken in a labour dispute were replaced for $2,188.	EquipmentLand ImprovementsRepair and Maintenance ExpenseBuildingsVehicles
5.	A fee of $1,520 was paid for adjusting and testing new machinery before its use.	BuildingsRepair and Maintenance ExpenseLand ImprovementsVehiclesEquipment
6.	Machinery damaged by a forklift was repaired for $4,560.	Repair and Maintenance ExpenseLand ImprovementsEquipmentBuildingsVehicles
7.	The transmission in a delivery truck was repaired for $2,390.	Repair and Maintenance ExpenseVehiclesLand ImprovementsEquipmentBuildings
8.	Expenditures totalling $2,790 were incurred to repaint the exterior of the building.	Repair and Maintenance ExpenseVehiclesBuildingsLand ImprovementsEquipment
9.	Paid $20,000 to convert the company’s delivery vehicles from gasoline to propane to increase fuel efficiency.	Repair and Maintenance ExpenseEquipmentLand ImprovementsBuildingsVehicles
10.	Paid $10,000 to replace the company’s light bulbs with more energy-efficient bulbs.	Repair and Maintenance ExpenseLand ImprovementsBuildingsVehiclesEquipment

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Crane Enterprises purchased equipment on March 15, 2018, for $81,030. The company also paid the following...

Crane Enterprises purchased equipment on March 15, 2018, for $81,030. The company also paid the following amounts: $550 for freight charges; $219 for insurance while the equipment was in transit; $1,690 for a one-year insurance policy; $2,012 to train employees to use the new equipment; and $2,521 for testing and installation. The equipment was ready for use on April 1, but the company did not start using it until May 1. Crane has estimated the equipment will have a 10-year...

On March 10, 2022, Oriole Company sells equipment that it purchased for $230,400 on August 20,...

On March 10, 2022, Oriole Company sells equipment that it purchased for $230,400 on August 20, 2015. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $20,160 at the end of that time, and depreciation has been computed on that basis. The company uses the straight-line method of depreciation. Compute the depreciation charge on this equipment for 2015, for 2022, and the total charge for the period from 2016 to...

On March 31, 2018, the Herzog Company purchased a factory complete with machinery and equipment. The...

On March 31, 2018, the Herzog Company purchased a factory complete with machinery and equipment. The allocation of the total purchase price of $930,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Cost Estimated Residual Value Estimated Useful Life in Years Land $ 135,000 N/A N/A Building 430,000 none 20 Machinery 230,000 12% of cost 10 Equipment 135,000 $ 13,000 4 Total $ 930,000 On June 29, 2019, machinery included...

On March 31, 2018, the Herzog Company purchased a factory complete with machinery and equipment. The...

On March 31, 2018, the Herzog Company purchased a factory complete with machinery and equipment. The allocation of the total purchase price of $1,090,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Cost Estimated Residual Value Estimated Useful Life in Years Land $ 145,000 N/A N/A Building 590,000 none 20 Machinery 150,000 12% of cost 8 Equipment 205,000 $ 16,000 6 Total $ 1,090,000 On June 29, 2019, machinery included...

On March 31, 2018, the Herzog Company purchased a factory complete with machinery and equipment. The...

On March 31, 2018, the Herzog Company purchased a factory complete with machinery and equipment. The allocation of the total purchase price of $1,050,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Cost Estimated Residual Value Estimated Useful Life in Years Land $ 125,000 N/A N/A Building 550,000 none 20 Machinery 190,000 12% of cost 8 Equipment 185,000 $ 13,000 4 Total $ 1,050,000 On June 29, 2019, machinery included...

On March 31, 2018, the Herzog Company purchased a factory complete with machinery and equipment. The...

On March 31, 2018, the Herzog Company purchased a factory complete with machinery and equipment. The allocation of the total purchase price of $950,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Cost Estimated Residual Value Estimated Useful Life in Years Land $ 125,000 N/A N/A Building 450,000 none 20 Machinery 250,000 12% of cost 10 Equipment 125,000 $ 13,000 4 Total $ 950,000 On June 29, 2019, machinery included...

On March 31, 2018, the Herzog Company purchased a factory complete with machinery and equipment. The...

On March 31, 2018, the Herzog Company purchased a factory complete with machinery and equipment. The allocation of the total purchase price of $1,040,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Cost Estimated Residual Value Estimated Useful Life in Years Land $ 120,000 N/A N/A Building 540,000 none 25 Machinery 200,000 10% of cost 6 Equipment 180,000 $ 15,000 5 Total $ 1,040,000 On June 29, 2019, machinery included...

Crane Company purchased equipment on March 27, 2018, at a cost of $228,000. Management is contemplating...

Crane Company purchased equipment on March 27, 2018, at a cost of $228,000. Management is contemplating the merits of using the diminishing-balance or units-of-production method of depreciation instead of the straight-line method, which it currently uses for other equipment. The new equipment has an estimated residual value of $4,000 and an estimated useful life of either four years or 80,000 units. Demand for the products produced by the equipment is sporadic so the equipment will be used more in some...

Crane Company purchased equipment on March 27, 2018, at a cost of $284,000. Management is contemplating...

Crane Company purchased equipment on March 27, 2018, at a cost of $284,000. Management is contemplating the merits of using the diminishing-balance or units-of-production method of depreciation instead of the straight-line method, which it currently uses for other equipment. The new equipment has an estimated residual value of $4,000 and an estimated useful life of either four years or 80,000 units. Demand for the products produced by the equipment is sporadic so the equipment will be used more in some...

Subjects