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ZanzabumX [31]
3 years ago
10

Point Company paid $4,000 cash to purchase a new machine. The company also paid $500 cash for an initial training cost that was

necessary to teach an employee how to operate the machine. Which of the following represents the journal entry that would be necessary to record all capitalized costs related to the purchase of the machine?debit machine (4500), credit cash (4500)
Business
1 answer:
spin [16.1K]3 years ago
4 0

Answer:

Dr Machinery $4500

Cr Cash                      $4500

Explanation:

The reason is that the Internation Accounting Standard IAS 16 Property, Plant & Equipment says that the company must capitalized all those costs that are necessary to make the asset ready to use which means that the cost of training which is $500 and purchasing cost which is $4000 must be capitalized as part of the asset.

So the entry would be:

Dr Machinery $4500

Cr Cash                      $4500

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In periods of rising prices when lifo is used, companies avoid reporting a ________ because a portion of the gross profit must b
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Galactic Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected
Stella [2.4K]

Answer:

24%

Explanation:

The computation of the average rate of return is shown below;

As we know that

The Average rate of return = Net income ÷ Average investment

where,

Net income is

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And, the average investment is

= (cost price + equipment) ÷ 2

= ($418,500 + $31,500) ÷ 2

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= $54,000 ÷ $225,000 × 100

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4 0
3 years ago
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3 years ago
He auto repair shop of Quality Motor Company uses standards to control the labor time and labor cost in the shop. The standard l
dalvyx [7]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

The standard labor cost for a motor tune-up is given below:

Standard Hours= 2.5

Standard Rate= $33

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The shop supervisor recalls that 58 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups:

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Labor spending variance $ 118 U

1) Direct labor efficiency variance= (SQ - AQ)*standard rate

Direct labor efficiency variance= (58*2.5  - actual quantity)*33

118= (145 - AQ)*33

118= 4,785 - 33AQ

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141.42= Actual Quantity

2) Direct labor price variance= (SR - AR)*AQ

80= (2.5 - Actual rate)*141.42

-273.55= -141.42AR

1.92= Actual rate

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3 years ago
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