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Kazeer [188]
3 years ago
7

Consider the expenditures listed below and classify each of the expenditures as a capital expenditure or a revenue expenditure r

elated to machinery.
a.

Purchase price.

b.

Ordinary recurring repairs to keep the machinery in good working order.

c.

Lubrication before machinery is placed in service.

d.

Periodic lubrication after machinery is placed in service.

e.

Major overhaul to extend useful life by three years.

f.

Sales tax paid on the purchase price.

g.

Transportation and insurance while machinery is in transit from seller to buyer.

h.

Installation.

i.

Training of personnel for initial operation of the machinery.
Business
1 answer:
Bingel [31]3 years ago
4 0

Answer:

a.  Purchase price.  This is capital expenditure.

b.  Ordinary recurring repairs to keep the machinery in good working order.   This is revenue expenditure

c.  Lubrication before machinery is placed in service.  This is revenue expenditure.

d.  Periodic lubrication after machinery is placed in service.  This is revenue expenditure.

e.  Major overhaul to extend useful life by three years.  This is capital expenditure.

f.  Sales tax paid on the purchase price.  This is capital expenditure. However, if sales tax is refundable than this will neither be classified as capital expense nor revenue expense.

g.  Transportation and insurance while machinery is in transit from seller to buyer.  This is capital expenditure.

h.  Installation.  This is capital expenditure.

i.  Training of personnel for initial operation of the machinery. This is revenue expenditure.

Explanation:

The costs that are charge as expense in profit and loss statement in the period in which thay are incurred are known as revenue expense.

The costs that are capitalized initially and expensed out as benifits, are derived from it, are classified as capital expenditure.

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The manager of a shoe store noticed that mukluks were flying off the shelf in anticipation of another exceptionally cold winter.
Margarita [4]

Answer: The manufacturer, because the shoe store's revocation of its offer was too late.

Explanation:

Based on the scenario given in the question, if the store manager subsequently refuses the manufacturer's delivery on December 1, and thee manufacturer sues the shoe store for breach of contract, the manufacturer will prevail because the shoe store's revocation of its offer was too late.

According to the mailbox rule under the contract law, this is the default rule that's used to determine when an offer is considered to be accepted and when there's communication of the acceptance. In this case, the revocation is too late therefore the manufacturer will prevail.

5 0
3 years ago
Adams Company sells a product whose contribution margin is $10 and selling price is $25.
Karolina [17]

Answer:

answer is b) False

Explanation:

given data

contribution margin = $10

selling price = $25

total fixed costs = $500

break-even point  = 100 units

solution

we get here Break even point that is

Break even point = \frac{fix\ cost}{contribution\ margin}   ...........1

Break even point = \frac{500}{10}

Break even point = 50 units

but we have given break-even point is 100 units

so answer is b) False

6 0
3 years ago
VLC Corporation sold merchandise with a cost of $200 on account for $300 to PRT Corporation; credit terms were 2 / 10, n / 30. V
tatyana61 [14]

Answer:

  • The entries in VLC's accounting information system to record all the preceding events will include all of the following except:

C. A credit togross profit

Explanation:

An entry to Gross Profit does not exist because the gross profit it's the result of the total sales minus the Cost of Goods, so the Gross Profit it's a result and not a journal entry.

The other entries are used as follows:

A. A debit to cost of goods sold

D. A credit to inventory

B. A debit to delivery expense

A credit to Cash

3 0
3 years ago
Calculate the payback period for the following investment: Invest ($10,000). Cash flows in Yr1: 1,000; Yr2: 3,000; Yr3: 3,000; Y
mihalych1998 [28]

Answer:

4 years

Explanation:

The computation of the payback period is shown below:

In the payback, we analyze in how many years the invested amount is recovered

In year 0 = -$10,000

In year 1 = $1,000

In year 2 = $3,000

In year 3 = $3,000

In year 4 = $3,000

In year 5 = $100,000

In year 6 = $250,000

If we sum the first 4 year cash inflows than it would be $10,000

And, the initial investment is also $10,000

So, in 4 years, the investment amount is recovered

8 0
3 years ago
Suppose that the manager of a restaurant has two new employees, Rahul and Henriette, and is trying to decide which one to assign
romanna [79]

Answer:

a. Who should be assigned to chop vegetables?

  • Henriette

b. Who should be assigned to wash dishes?

  • Rahul

Explanation:

we need to determine the opportunity cost of each employee:

Rahul's opportunity cost of chopping one pound of vegetables = 100 / 20 = washing 5 dishes per hour.

Rahul's opportunity cost of washing 1 dish per hour = 20 / 100 = 0.2 pounds of chopped vegetables.

Henriette's opportunity cost of chopping one pound of vegetables = 120 / 30 = washing 4 dishes per hour.

Henriette's opportunity cost of washing 1 dish per hour = 30 / 120 = 0.25 pounds of chopped vegetables.

Rahul should wash dishes while Henriette should chop vegetables because their opportunity cost of performing these activities is lower.

4 0
3 years ago
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