kerensak
Apr 2, 2006, 02:58 PM
Please don't think I don't know this stuff because up to this point I have done very well. My teacher sucks at explaining this stuff and it is hard for me to self-teach myself stuff that is completely foreign to me. The examples in the book are good, but then when I try to relate it back to the problem I get confused. I'm sorry if it seems like I'm asking for the answers. I'm asking for the answers and how you get to them so I know in the future for more homework problems.
PROBLEM
Wilmet College recently purchased new computing equipment for its library. The following information refers to the purchase and installation of this equipment:
The list price of the equipment was $275,000; however, Wilmet College qualified for an "education discount" of $25,000. It paid $50,000 cash for the equipment, and issued a 3-month, 9% note payable for the remaining balance. The note, plus accrued interest charges of $4500, was paid promptly @ the maturity date.
In addition to the amounts descibed in #1, Wilmet paid sales taxes of $15,000 @ the date of the purchase.
Freight charges for delivery of the equipment totaled $1000.
Installation costs related to the equipment amounted to $5000.
During installation, one of the computer terminals was accidentally damaged by a library employee. It cost the college $500 to repair the damage.
As soon as the computers were installed, the college paid $4000 to print admissions brochures featuring the library's new, state-of-the-art computing facilities
INSTRUCTIONS
A. In one sentence, make a general statement summarizing the nature of the expenditures that qualify for inclusion in the cost of plant assets such as computing equipment.
B. For each of the 6 numbered paragraphs (above), indicate which items should be included by Wilmet College in the total cost debited to its Computing Equipment account.
C. Cinoyte the total cost debited to the college's Computing Equipment account.
D/ Prepare a journal entry at the end of the current year to record depreciation on the computing equipment. Wilmet College will depreciate this equipment by the straight-line method (half-year convention) over an estimated useful life of 5 years. Assume a zero R.V.
I'm pretty sure I can take care of A by myself though.
PROBLEM
Wilmet College recently purchased new computing equipment for its library. The following information refers to the purchase and installation of this equipment:
The list price of the equipment was $275,000; however, Wilmet College qualified for an "education discount" of $25,000. It paid $50,000 cash for the equipment, and issued a 3-month, 9% note payable for the remaining balance. The note, plus accrued interest charges of $4500, was paid promptly @ the maturity date.
In addition to the amounts descibed in #1, Wilmet paid sales taxes of $15,000 @ the date of the purchase.
Freight charges for delivery of the equipment totaled $1000.
Installation costs related to the equipment amounted to $5000.
During installation, one of the computer terminals was accidentally damaged by a library employee. It cost the college $500 to repair the damage.
As soon as the computers were installed, the college paid $4000 to print admissions brochures featuring the library's new, state-of-the-art computing facilities
INSTRUCTIONS
A. In one sentence, make a general statement summarizing the nature of the expenditures that qualify for inclusion in the cost of plant assets such as computing equipment.
B. For each of the 6 numbered paragraphs (above), indicate which items should be included by Wilmet College in the total cost debited to its Computing Equipment account.
C. Cinoyte the total cost debited to the college's Computing Equipment account.
D/ Prepare a journal entry at the end of the current year to record depreciation on the computing equipment. Wilmet College will depreciate this equipment by the straight-line method (half-year convention) over an estimated useful life of 5 years. Assume a zero R.V.
I'm pretty sure I can take care of A by myself though.