Question
The Bramos Printing Company was founded in 2000 by Mr. Timken as a one-man-job printing firm inasmallsouthwesterntown.Shortly after its founding,theownerdecidedtoconcentrateononespecialty line of printing. Because of
The Bramos Printing Company was founded in 2000 by Mr. Timken as a one-man-job printing firm inasmallsouthwesterntown.Shortly after its founding,theownerdecidedtoconcentrateononespecialty line of printing. Because of a high degree of technical proficiency, the company experienced a rapid growth. However, the company suffered from a competitive disadvantage in that the major market for this specialized output was in a metropolitan area over 300 miles away from the company's plant. For this reason, the owner, in 2012, decidedtomovenearerhisprimarymarket.He also decidedtoexpandand modernize his facilities at the time of the move. After some investigation, an attractive site was found in a suburb of his primary market, and the move was made.A balancesheetpreparedpriortothemoveisshowninExhibit
1)Newbinderyequipmentwaspurchased.Theinvoicecostofthisequipmentwas$200,000.A2%discountwastakenbytheBramosCompany,sothatonly$196,000wasactuallypaidtothe seller. The Bramos Company also paid $800 to a trucker to have this equipment delivered. Installation of this equipment was made by Bramos workmen who worked a total of 40 hours. Thesemenreceived$15.00perhourinwages,buttheirtime wasordinarilychargedtoprintingjobsat$40.00perhour,thedifferencerepresentinganallowanceforoverhead($21.00) and profit ($4.00).
Question:
1.)New Bindery Equipment - Calculate the cost that would go on the books for this purchase.You should do some research as to what additional costs are included.
i.)What about your workers costs?Are they included and if so at what rate?
ii.)Fully analyze this asset as we have done in class.Calculate the depreciation for this asset over its ENTIRE life. Do not consider section 179 or bonus depreciation.
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