198.A company purchased a special purpose machine on September 15 of the past year, and it was installed and ready to run on January 1 of this year. The following costs were incurred in the purchase and installation of the machine. Determine the total cost of the machine.
Invoice price plus sales tax$1,270,500
Freight costs9,000
Setup costs51,000
Costs to adjust machine to appropriate specifications36,000
Electrical connections32,000
Maintenance supplies for future use108,000
Traffic fine incurred during transport of machine300
Cost of special foundation for machine18,500
199.A company paid $595,000 for property that included land appraised at $384,000; land improvements appraised at $128,000; and a building appraised at $288,000. The plan is to use the building as a manufacturing plant. Determine the amounts that should be recorded as:
(a)Land$
(b)Land Improvements$
(c)Building$
200.Prepare journal entries to record the following transactions of a company during the current year:
Mar. 1Purchased a truck for $40,000 with a 5-year useful life and a $5,000 salvage value. Also paid 6% sales tax, $350 for the annual truck license, $300 to paint the truck with the company’s colors and name, and $1,500 for maintenance supplies for the future. All payments were in cash.
Mar. 10Purchased a garage from a neighboring business with a 7%, 4-year, $67,000 note. The seller’s book value for the garage was $42,750. The estimated remaining useful life of the garage is 10 years.
July 5Paid $800 cash to replace (uninsured) garage windows broken during a storm.
Aug. 25Purchased used shop equipment for $10,700 cash. Sales tax was $825, freight costs $250, $3,200 for a special base to house the equipment, and reconditioning costs $900, all of which were paid in cash. The estimated useful life of the equipment is 3 years and salvage value is $500.
Oct. 5Purchased office equipment for $11,500 cash. Paid $1,290 in sales tax, $550 for repairs incurred from damage during installation, and $2,200 for supplies to be used for periodic preventive maintenance. The estimated useful life of the equipment is 8 years and salvage value is $1,200.