A used machine with a purchase price of $77,000, requiring an overhaul costing $

Question

A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis of $82,000 $90,000 $8S,000 $93,000 Expenditures that add to the utility of fixed assets for more than one accounting period are capital expenditures revenue expenditures utility expenditures committed expenditures Which of the following below is an example of a capital expenditure? replacing an engine in a company car cleaning the carpet in the front room replacing all burned-out light bulbs in the factory tune-up for a company truck In a lease contract, the party who legally owns the asset is the lessor lessee banker operator The journal entry for recording payment for the short-term lease of a fixed asset would debit the fixed asset and credit Cash debit Kent Expense and credit Cash debit a liability and credit Cash be a memo entry only Which of the following are criteria for determining whether to record an asset as a fixed asset? must be tangible and an investment must be long lived and used by the company in its normal operations must be short lived and tangible must be an investment and long lived A fixed asset's estimated value at the time it is to be retired from service is called book value carrying value residual value market value All of the following are needed for the calculating of straight-line depreciation except units produced

Explanation / Answer

1- answer is D 93000

77000+8000+5000+3000 = 93000

2-A capital expenditure

3- A replacing a engine

4A lessor

5- b short term lease payments are charged from revenue account

6- b long lived and used in normal operations

7- c residual value also called scrap value

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