Accounting

Chapter 10-1 Home Work

Question 1 ans:

(A) Purchase:

|Cash paid for equipment, including HST of 14,300 failed to take 2% cash discount (2%*125,000) |$122500 |

|125000-2500 or .98*125000= | |

|Freight and insurance while in transit |3,000 |

|Cost of moving equipment into place at factory |5,000 |

|Wage cost for technicians to test equipment |5,000 |

|Material cost for testing |500 |

|Special plumbing fixtures required for new equipment | |

|Fail to take 2% (2%*6000)= 6000-120 or .98*6000= |5880 |

|Provincial government incentive | (35,000) |

|Total cost |$106,880 |

(B)The insurance premium paid on the equipment during the first year of operation should be reported

As insurance expense. Repair cost on equipment incurred in the first year of operation should be reported

Repair and maintenance expense.

The variable of 10,000 should be reported in the construction as well as the one month delay in installation

To get the total cost.

Question 2 ans:

(A)

|Blending machine |30,053 |

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