1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
blondinia [14]
3 years ago
11

United Van Lines purchased a truck with a list price of $250,000 subject to a 6% discount if paid within 30 days. United Van Lin

es paid within the discount period. It paid $4,000 to obtain title to the truck with the state and an $800 license fee for the first year of operation. It paid $1,500 to paint the firm’s name on the truck and $2,500 for property and liability insurance for the first year of operation. What acquisition cost of this truck should United Van Lines record in its accounting records? Indicate the appropriate accounting treatment of any amount not included in acquisition cost.
Business
1 answer:
Varvara68 [4.7K]3 years ago
8 0

Answer: <em>Acquisition cost</em> of Truck for <em>United Van Lines</em>= List Price - Discount Availed + Truck title fees paid + Cost incurred on painting the Truck

= $ 250,000 - (.06 i.e. 6%) * $ 250,000 + $ 4,000 + $ 1500

= $ 250,000 - $ 15,000 + $ 4,000 + $ 1,500

= $ 240000 + $ 5500= $ 245500

License fees of $ 800 and property and liability insurance of $ 2,500 will both be debited to <em>United Van Lines</em> P&L A/c.

Explanation: The items of list price, discount availed, truck title fees paid and cost incurred on painting the Truck are all included in capital expenditure i.e. one time expenditure of <em>United Van Lines</em>, thus they are all included in the <em>acquisition cost</em> of the truck.

The items of license fees and property and liability insurance of $ 800 and $ 2,500 respectively are both revenue expenditures i.e. repetitive expenditures, hence they both will be debited to P&L A/C as follows-

License fees a/c Dr.                                                    $ 800

Property and liability insurance a/c Dr.                       $ 2,500

                   To P&L a/c                                                                 $3,300

(License fees and property and liabilty insurance paid for 1st Year)

You might be interested in
On April 2, KLV sold $30,000 of inventory items on credit with the terms 1/10, net 30. Payment on $18,000 sales was received on
yuradex [85]

Answer:

b. debit to Accounts Receivable and credit to Sales Discount Forfeited for $120

Explanation:

The last payment of $12,000 it's without discount because was not made within the 10 days, so it's necessary to Debit Cash by $12,000 and reverse the accrual for the remaining $120 discount offered not applied.

The it's necessary to record this entry:

b. debit to Accounts Receivable and credit to Sales Discount Forfeited for $120

7 0
2 years ago
In 2016, Chaya Corporation, an accrual basis, calendar year taxpayer, provided services to clients andearned $25,000. The client
Artemon [7]

Answer:

$27,333.33

Explanation:

The computation of the amount of income reported is shown below:

= Provided services to the customer + Payment received × number of months ÷ given number of months

= $25,000 + $12,000 × 7 months ÷ 36 months

= $25,000 + $2,333.33

= $27,333.33

The seven months is calculated from the June 1 to December 31. We assume the books are closed on December 31

7 0
2 years ago
Which of the following is an implicit cost in Jim's business venture?
lozanna [386]

Answer:

D) i and iii

Explanation:

Implicit cost refers to economic costs that are not directly attributed to the business but are nevertheless important in making informed decisions. In this case the opportunity costs are implicit cost. They are:

  • Salary forgone which should have been earned at another job, and
  • Interest lost from savings account.  
3 0
3 years ago
Aims of Accelerated Growth Initiative for South Africa
irinina [24]

Answer:

The Accelerated and Shared Growth Initiative for South Africa (AsgiSA) was prepared during 2005 and launched in February 2006. Its objectives were to introduce policies, programmes and interventions that would allow the South African economy to grow enough to halve poverty and unemployment between 2004 and 2014.

Explanation:

6 0
2 years ago
The following information applies to the questions displayed belowWarnerwoods Company uses a perpetual inventory system. It ente
Vadim26 [7]

Answer:

Gross profit under LIFO = $40,570 - $26,340 = $14,230

Gross profit under FIFO = $40,570 - $24,520 = $16,050

Gross profit under average cost = $40,570 - $26,238.46 = $14,331.54

Gross profit under specific ID = $40,570 - $26,070 = $14,500

Explanation:

I divided the purchases and sales:

Mar. 1 Beginning 130 units $51.60 per unit

Mar. 5 Purchase 240 units $56.60 per unit

Mar. 18 Purchase 100 units $61.60 per unit

Mar. 25 Purchase 180 units $63.60 per unit

Totals 650 units, $37,900

Mar. 9 Sales 290 units $86.60 per unit

Mar. 29 Sales 160 units a $96.60 per unit

Totals 450 units. $40,570

COGS under LIFO:

(240 x $56.60) + (50 x $51.60) = $16,164

160 x $63.60 = $10,176

total = $26,340

COGS under FIFO:

(160 x $56.60) + (130 x $51.60) = $15,764

(110 x $56.60) + (50 x $61.60) = $8,756

total = $24,520

COGS under average cost:

($37,900 / 650) x (290 + 160) = $26,238.46

COGS under specific ID:

(80 x $51.60 ) + (210 x $56.60) = $16,014

(60 x $61.60) + (100 x $63.60) = $10,056

total = $26,070

3 0
3 years ago
Other questions:
  • What type of technology would be needed to gather evidence of a jet stream?
    14·1 answer
  • Pensacola Inc exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance
    15·1 answer
  • Which of the following statements about mentors is true?
    9·2 answers
  • The average total cost of producing electronic calculators in a factory is $30 at the current output level of 220 units per week
    14·1 answer
  • Bingerton Industries uses a perpetual inventory system. The company began the year with inventory of $77,000. Purchases of inven
    13·1 answer
  • Which of the following accounts allows full access to the system, while accessing other systems on the network? Local Admin acco
    14·1 answer
  • During May, Keenan Company accumulated 570 hours of direct labor costs on Job 200 and 610 hours on Job 305. The total direct lab
    6·1 answer
  • ) In April of 2019, Mike acquired a machine for $30,000 to use in his business. It is the only plant asset he purchased this yea
    14·1 answer
  • Part of the budgeting process is summarizing the financial statement effects on the budgeted income statement and the budgeted b
    13·1 answer
  • In the past, the policy-making relationship between states and the federal government was called ______, since there was clear s
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!