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Liberty ACCT 211 Connect Homework Chapter 8 Exercises Answers Complete Solutions
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Question 1
Rizio Co. purchases a machine for $14,300, terms 1/10, n/60, FOB shipping point. The seller prepaid the $323 freight charges, adding the amount to the invoice and bringing its total to $14,623. The machine requires special steel mounting and power connections costing $989. Another $466 is paid to assemble the machine and get it into operation. In moving the machine to its steel mounting, $315 in damages occurred. Materials costing $40 are used in adjusting the machine to produce a satisfactory product. The adjustments are normal for this machine and are not the result of the damages.
Complete the below table to calculate the cost recorded for this machine. (Rizio pays for this machine within the cash discount period.)
Question 2
Rodriguez Company pays $390,000 for real estate plus $20,670 in closing costs. The real estate consists of land appraised at $193,500; land improvements appraised at $64,500; and a building appraised at $172,000.
1. Allocate the total cost among the three purchased assets.
2. Prepare the journal entry to record the purchase.
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Question 3
Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $84,200. The machine’s useful life is estimated at 10 years, or 386,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 32,600 units of product.
Determine the machine’s second-year depreciation and year end book value under the straight-line method.
Question 4
Determine the machine’s second-year depreciation using the units-of-production method.
Question 5
Determine the machine’s second-year depreciation using the double-declining-balance method.
