Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1)Suppose Central Machine Tools purchased an industrial lathe to be used in its manufacturing process. The purchase price was $62,000. Central paid a freight company

1)Suppose Central Machine Tools purchased an industrial lathe to be used in its manufacturing process. The purchase price was $62,000. Central paid a freight company $1,000 to transport the machine to its plant location plus $300 shipping insurance. In addition, the machine had to be installed and mounted on a special platform built specifically for the machine at a cost of $1,200. After installation, several trial runs were made to ensure proper operation. The cost of these trials including wasted materials was $600. At what amount should Central capitalize the lathe? Show the calculation

2)

The Astro Corporation develops computer software graphics programs for sale. A new development project begun in 2008 reached technological feasibility at the end of June 2009, and the product was available for release to customers early in 2010. Development costs incurred in 2009 prior to June 30 were $1,200,000 and costs incurred from June 30 to the product availability date were $800,000. 2010 revenues from the sale of the new product were $3,000,000 and the company anticipates an additional $7,000,000 in revenues. The economic life of the software is estimated at four years.

The Astro Corporation develops computer software graphics programs for sale. A new development project begun in 2008 reached technological feasibility at the end of June 2009, and the product was available for release to customers early in 2010. Development costs incurred in 2009 prior to June 30 were $1,200,000 and costs incurred from June 30 to the product availability date were $800,000. 2010 revenues from the sale of the new product were $3,000,000 and the company anticipates an additional $7,000,000 in revenues. The economic life of the software is estimated at four years.(record all journal entries)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial & Managerial Accounting

Authors: Jan Williams, Sue Haka, Mark Bettner, Joseph Carcello

15th Edition

0073526991, 9780073526997

More Books

Students also viewed these Accounting questions

Question

Are the hours flexible or set?

Answered: 1 week ago

Question

1. Too understand personal motivation.

Answered: 1 week ago