Pharoah Company purchased equipment on account on September 3, 2022, at an invoice price of $185,000....
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Pharoah Company purchased equipment on account on September 3, 2022, at an invoice price of $185,000. On September 4, 2022, it paid $4,200 for delivery of the equipment. A one-year, $1,920 insurance policy on the equipment was purchased on September 6, 2022. On September 20, 2022, Pharoah paid $3,800 for installation and testing of the equipment. The equipment was ready for use on October 1, 2022. Pharoah estimates that the equipment's useful life will be four years, with a residual value of $15,500. It also estimates that, in terms of activity, the equipment's useful life will be 88,750 units. Pharoah has a September 30 fiscal year end. Assume that actual usage is as follows: # of Units Year Ended September 30 (a) 15,450 2023 23,750 2024 20,050 2025 30,400 2026 Determine the cost of the equipment. Cost of equipment $ Pharoah Company purchased equipment on account on September 3, 2022, at an invoice price of $185,000. On September 4, 2022, it paid $4,200 for delivery of the equipment. A one-year, $1,920 insurance policy on the equipment was purchased on September 6, 2022. On September 20, 2022, Pharoah paid $3,800 for installation and testing of the equipment. The equipment was ready for use on October 1, 2022. Pharoah estimates that the equipment's useful life will be four years, with a residual value of $15,500. It also estimates that, in terms of activity, the equipment's useful life will be 88,750 units. Pharoah has a September 30 fiscal year end. Assume that actual usage is as follows: # of Units Year Ended September 30 (a) 15,450 2023 23,750 2024 20,050 2025 30,400 2026 Determine the cost of the equipment. Cost of equipment $
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Related Book For
Accounting Principles Volume 1
ISBN: 9781119786818
9th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
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