Answer:
a. $84,300.
Explanation:
IAS-16 that deals with Property, Plant, and Equipment requires entities to capitalize those costs that needs to be incurred to bring the asset to its intended use or to get control of the asset in this case. Here such costs include:
- Purchase Price, Commission, Insurance, and Back Taxes.
Property Taxes due for the current year should be recognized in the Statement of Profit or Loss. This Amount of $1,000 is not capitalized because it is not necessary to pay it to gain control of the land. On the other hand, the back taxes must be paid because the company won't be allowed to transfer the land if there are any unpaid taxes, not of this year.
So, the Capitalized Cost of Land is $84,300 (75,000 + 4,500 + 800 + 4,000).
Answer:
March 1 Issue common stock for $21,000.
- Dr Cash 21,000
- Cr Common stock 21,000
March 5 Obtain $9,000 loan from the bank by signing a note.
- Dr Cash 9,000
- Cr Notes payable 9,000
March 10 Purchase construction equipment for $25,000 cash.
- Dr Equipment 25,000
- Cr Cash 25,000
March 15 Purchase advertising for the current month for $1,100 cash.
- Dr Advertising expense 1,100
- Cr Cash 1,100
March 22 Provide construction services for $18,000 on account.
- Dr Accounts receivable 18,000
- Cr Service revenue 18,000
March 27 Receive $13,000 cash on account from March 22 services.
- Dr Cash 13,000
- Cr Accounts receivable 13,000
March 28 Pay salaries for the current month of $6,000.
- Dr Salaries expense 6,000
- Cr Cash 6,000
Answer:
Total overhead= $550,000
Explanation:
Giving the following information:
The total fixed manufacturing overhead cost of $440,000
variable manufacturing overhead of $2.20 per machine-hour
50,000 machine-hours.
To calculate the total overhead, we need to sum to the fixed overhead the total variable manufacturing overhead:
Total overhead= 440,000 + 2.2*50,000= $550,000
Answer: Option D
Explanation: Expenses incurred by business in day to day to operations are called costs. These costs can be divided as follows:-
FIXED COST : These are the cost which are independent of the level of output.
VARIABLE COST : These are the cost which varies as per the level of output.
Increase in the level of production will increase the electricity consumption, also consumption of direct materials is directly related to number of units produced. Wages of workers are usually dependent on the output they produce. Hence, only insurance premium is a fixed cost as the company has to pay it irrespective of the level of output.
Answer:
Alternative A Alternative B Net Income (B-A)
Revenues $149,400 $186,500 $37,100
Costs $102,900 $123,800 $20,900
Net income $46,500 $62,7000 $16,200
Project B has incremental revenue of $37,100, cost $20,900 and net income $16,200.
Explanation:
Net income is amount of earning that a company of individual maker after deducting all the expense from the revenue for a specific period of time. Net income can be calculated by subtracting all the related expenses from the revenue / income for the period.