Answer:
S/N ACCOUNT DEBIT CREDIT
1 Equipment $22,000
Cash $22,000
Being payment for new component expected to increase the
equipment’s productivity by 10% a year
2. Equipment Repairs expenses $6,250
Cash $6,250
Being payment for equipment repair
3. Equipment $14,870
Cash $14,870
Being payment for equipment repair to prolong the useful life
the asset
Explanation:
The initial cost incurred in acquiring an asset is debited to asset account, subsequently every other cost spent on the assets are either expenses against the earning of that period or expensed over many years over the useful life of the asset.
Capitalization is the recognition of an expense as an asset in the balance sheet rather than expenses in the income statement.
The payment of $22,000 paid for the equipment productivity must be capitalized, that is added to the cost of the asset because it is a cost that is expected to increase the equipment’s productivity by 10% a year.
The $6,250 paid for normal repair is a revenue items which is to be expensed against the earning of that period.
The $14,870 paid for repairs which will increase the useful life of the equipment from four to five years is a capital expenditure which should capitalized, that is added to the cost of the asset.
There are two different options I would give her:
1) You can use your credit card now if you know that within the 30 days of purchasing the T.V. (or how ever many days until interest accrues if sooner) you will have enough money to properly pay your card off so that you aren't charged interest. Once you add interest, the T.V. becomes a much larger expense overtime due to paying the interest. Also, if it's a card that you get cash back for, you can 'make money' essential on your purchase because you'll get cash back.
2) Wait for the raise, what if the raise doesn't happen? What if something unexpected happens and you've used all your funds for a T.V. that isn't a necessity. There are so many reason to wait and pay cash for something. In this situation I probably wouldn't use all of my appropriated emergency funds for a T.V. and save the extra money from the raise.
Answer:
$540,000
Explanation:
Calculation for The company's differential revenue from the acceptance of the offer
Using this formula
Differential revenue = Number of units of export order * Offer price per unit
Let plug in the formula
Differential revenue=9,000*$60
Differential revenue= $540,000
Therefore the company's differential revenue from the acceptance of the offer is $540,000
Answer:
increase since his/her productivity will increase
Explanation:
An increase in physical capital generally increases worker productivity even if all the other factors of production remain the same. Physical capital includes machinery, buildings, computers, tools, etc., which make it easier for the workers to perform their tasks, therefore it increases their productivity.
E.g. a worker needs to deliver goods, and if he uses a delivery truck instead of a bicycle, he/she will be able to do it faster. That will allow the worker to make more deliveries per day ⇒ increase in the worker's productivity. The delivery truck represents the increase in physical capital.
