Exercise 01 Welborne Corporation incurred the following cost of opening a new production area in its main factory building: May 10 Paid $220,000 for restructuring and finishing new production area. May 15 Paid $80,000 for cement foundation for placement of new machinery May 20 Received new production equipment with an invoice price of S450,000. A Purchase discount (Trade discount) of 10 percent was applied to the gross purchase price. May 27 Paid freight on equipment of $35,000 May 29 Paid invoice for equipment May 30 Cost of installing equipment was $14,000 June 02 Paid president's salary of $10,000 fro June. June 07 Received refund of $8,000 on cement work for equipment foundation June 09 Paid exorcise taxes on equipment of $19,000. Required: 1- Compute the amount that should be included as equipment cost? 2- What treatment should be accorded those cost nof included in equipment cost? 3- How should depreciation on the equipment be reported in Welborne's Income Statement? 4 If Welborne had borrowed money to pay for the equipment, how should the interest on the amount borrowed be reported? Exercise 01 Welborne Corporation incurred the following cost of opening a new production area in its main factory building: May 10 Paid $220,000 for restructuring and finishing new production area. May 15 Paid $80,000 for cement foundation for placement of new machinery May 20 Received new production equipment with an invoice price of S450,000. A Purchase discount (Trade discount) of 10 percent was applied to the gross purchase price. May 27 Paid freight on equipment of $35,000 May 29 Paid invoice for equipment May 30 Cost of installing equipment was $14,000 June 02 Paid president's salary of $10,000 fro June. June 07 Received refund of $8,000 on cement work for equipment foundation June 09 Paid exorcise taxes on equipment of $19,000. Required: 1- Compute the amount that should be included as equipment cost? 2- What treatment should be accorded those cost nof included in equipment cost? 3- How should depreciation on the equipment be reported in Welborne's Income Statement? 4 If Welborne had borrowed money to pay for the equipment, how should the interest on the amount borrowed be reported