Question

On Janurary 1,2012, Jose Company purchased a building for $200,000 and a delivery truck for $20,000....

On Janurary 1,2012, Jose Company purchased a building for $200,000 and a delivery truck for $20,000. The following expenditures have been incurred during 2014:

* The building was painted at the cost of $5,000

* To prevent leaking, new windows were installed in the building at a cost of $10,000.

* To improve production, a new conveyor system was installed at a cost of $40,000

* The delivery truck was repainted with a new compnay logo at a cost of $1,000

* The allow better handling of larger loads, a hydraulic lift system was installed on the truck at a cost of $5,000

* The truck's engine was overhauled at a cost of $4,000

1.Determine which of those costs should be capitalized. Also record the journal entry for the capitalized costs.( The journal entry is important). Assume that all cost were incurred on Janurary 1. 2014.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The following should get capitalized -->

1. New window installation as this will prevent leakages and increase building life

JOURNAL

Building Gross Block.. DR 10,000

Bank...........................CR   10,000

2. Conveyor system installation as this shall increase the productivity

JOURNAL

Conveyor System Gross Block ..DR 40,000

Bannk ........................................CR 40,000

3. Hydraulic lift system installed also to get capitalized

JOURNAL

Delivery Truck Gross Block ..DR 5,000

Bank .....................................CR 5,000

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Economic Life The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost...
Economic Life The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given below. The company's cost of capital is 11%. Year Annual Operating Cash Flow Salvage Value 0 -$22,500 $22,500 1 6,250 17,500 2 6,250 14,000 3 6,250 11,000...
On April 1, 2018, Milgard Corp bought a delivery truck at a cost of $20,000. The...
On April 1, 2018, Milgard Corp bought a delivery truck at a cost of $20,000. The truck has a 5-year useful life with an estimated salvage value of $5,000. Required: Using the straight-line method, compute the depreciation expense for December 31, 2018. Using the straight-line method, compute the depreciation expense for December 31, 2019. (c)       Using the straight-line method, what is the Accumulated Depreciation on December 31, 2018. Using the straight-line method, what is the Accumulated Depreciation on December 31,...
Data for the next 3 questions: Sara Company purchased a delivery truck at $40,000 plus 8%...
Data for the next 3 questions: Sara Company purchased a delivery truck at $40,000 plus 8% sales taxes. Sara paid $5,000 in cash and financed the rest at 6% requiring 36 equal monthly payment at the end of each month. Q4. Provide the journal that must be made on purchase date Account Debit Credit Q5. Complete partial Loan Amortization Schedule in the space provided below. Title: Payment # 0 1 2 Q6. Provide the necessary journal entry that company must...
The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and...
The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given below. The company's cost of capital is 10.5 percent. Year Annual Operating Cash Flow Salvage Value 0 -$22,500 $22,500 1 6,250 17,500 2 6,250 14,000 3 6,250 11,000 4...
eBook Economic Life The Scampini Supplies Company recently purchased a new delivery truck. The new truck...
eBook Economic Life The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given below. The company's cost of capital is 9.5 percent. Year Annual Operating Cash Flow Salvage Value 0 -$22,500 $22,500 1 6,250 17,500 2 6,250 14,000 3...
The following transactions occurred during 2020. Assume that depreciation of 10% per year is charged on...
The following transactions occurred during 2020. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all fixed assets acquired during the year, and no depreciation is charged on fixed assets disposed of during the year. Jan. 30 A building that cost $184,800 in 2003 is torn down to make room for a new building....
The following transactions occurred during 2020. Assume that depreciation of 10% per year is charged on...
The following transactions occurred during 2020. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all fixed assets acquired during the year, and no depreciation is charged on fixed assets disposed of during the year. Jan. 30 A building that cost $147,840 in 2003 is torn down to make room for a new building....
1. Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $15,000 for the truck....
1. Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $15,000 for the truck. The truck is expected to have a $2,500 residual value and a 5-year life. Cambridge has a December 31 fiscal year end. Using the double-declining balance method, how much is the 2019 depreciation expense? (Enter only whole dollar values.) Hint: what is the year 2 depreciation amount? 2. Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $22,000 for the truck. The...
1. The Whatever Corp. purchased equipment on March 1, 2013 as follows: Equipment Cost $260,000 Shipping...
1. The Whatever Corp. purchased equipment on March 1, 2013 as follows: Equipment Cost $260,000 Shipping costs $10,000 Estimated Salvage Value $25,000 Estimated Useful Life 10 Life time units of Production 1,000,000 If the Straight line method is used, (a) what is the depreciation expense as of December 31, 2013? (b) What will be the Depreciation expense for the calendar year 2014? 2. If the Whatever Corp. uses the Double Declining Balance Method, what would the depreciation expense be for...
Splish Corporation operates a retail computer store. To improve delivery services to customers, the company purchases...
Splish Corporation operates a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2020. The terms of acquisition for each truck are described below. 1. Truck #1 has a list price of $33,150 and is acquired for a cash payment of $30,719. 2. Truck #2 has a list price of $35,360 and is acquired for a down payment of $4,420 cash and a zero-interest-bearing note with a face amount of $30,940....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT