On August 1, 2017, Concord Corporation purchased a new machine on a deferred payment basis. A down
Question:
On August 1, 2017,Concord Corporationpurchased a new machine on a deferred payment basis. A down payment of $15000was made and 4 monthly installments of $10500each are to be made beginning on September 1, 2017. The cash equivalent price of the machine was $53500.Concordincurred and paid installation costs amounting to $5000. The amount to be capitalized as the cost of the machine is
$53500.
$58500.
$57000.
$62000.
2On January 2, 2017,Bonita Industriesbegan construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2018. Expenditures for the construction were as follows:
January 2, 2017$609000September 1, 20171802400December 31, 20171802400March 31, 20181802400September 30, 20181203000
Bonita Industriesborrowed $3400000on a construction loan at12% interest on January 2, 2017. This loan was outstanding during the construction period. The company also had $13320000in9% bonds outstanding in 2017 and 2018.
The interest capitalized for 2018 was:
$358004
$377309
$71309
$3060
3.A machine cost $1202000, has annual depreciation of $208000, and has accumulated depreciation of $943000 on December 31, 2017. On April 1, 2018, when the machine has a fair value of $275000, it is exchanged for a machine with a fair value of $1347000 and the proper amount of cash is paid. The exchange had commercial substance.
The new machine should be recorded at
$1347000.
$1331000.
$1218000.
$1072000.