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The question is at the top, I just need to know if my work is correct Option #2: Acquisition Costs. Equipment Acme Boxplant purchased new
The question is at the top, I just need to know if my work is correct
Option #2: Acquisition Costs. Equipment Acme Boxplant purchased new equipment for their box plant. One item was a die cut machine and the other, a corrugator. Both machines are used to manufacture boxes. The die cut machine costs $900,000, and the corrugator costs $1.5 million. Acme purchased the equipment, including the sales tax, on account, with amounts due in 45 days. Additional costs were paid in cash Die Cut Machine Sales tax Freight charges $54,000 55,000 8,500 75,000 Insurance Installation of the die cut Corrugator Sales tax Freight charges Insurance Installation of the corrugator Personnel training costs to run machine Trial Runs $90,000 55,000 8,500 75,000 50,000 10,000 uestions 1 & 2 Capitalize Die Cut Machine Items Purchase Price Sales Tax Freight Charges Installation 900,000 $54,000 $55,000 75,000 0 $1,084,000 Total cost Capitalize Corrugator Machine Items Purchase Price Sales Tax Freight Charges Installation Trial Run $1,500,000 90,000 55,000 75,000 10,000 0 0 Total cost $1,730,000 uestion 3 Journal Entries Die Cut Machine $1,084,000 Accounts Payable Cash $954,000 $130,000 To purchase and capitalize Die Cut machine Corrugator $1,730,000 Accounts Payable Cash $1,590,000 $140,000 To purchase and capitalize Corrugator machineStep by Step Solution
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