At what amount should Abreau report each asset on its books c Abreau purchased

At what amount should abreau report each asset on its

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sale. At what amount should Abreau report each asset on its books? c. Abreau purchased a delivery truck for $45,000. The truck had a useful life of five years and a salvage value of $5,000. Abreau paid $2,850 in taxes, title and registration fees, $600 in delivery charges and $1,200 in insurance on the
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truck. Prior to using the truck, Abreau installed a specialized cargo hood that cost $3,000 and painted the truck with the company’s logo at a cost of $550. During installation of the cargo hood, the installer broke the tailgate of the truck, which had to be repaired at a cost of $1,800. Two weeks after the delivery truck was put into use, the driver broke the indicator handle, which had to be replaced at a cost of $350. The company also had the washer fluid and engine oil in the truck changed at that time at a cost of $65. How much should Abreau capitalize as the cost of the truck? d. Abreau purchased a tract of land and a building for $300,000. It paid $3,300 in closing costs on the purchase and $1,800 on title insurance. Abreau paid $18,000 to tear down the old building and $2,000 to raze the land after removal of the building. The salvaged materials were sold for $6,000 to a junk dealer. Abreau spent $20,000 on architect fees for design of a new building, $18,000 for landscaping, $6,500 for a sprinkler system and $5,000 for the design of parking lots. Additionally, Abreau spent $1,950 on liability insurance during the construction. They paid $525,000 to the contractor upon completion of the building and had to pay a one-time fee of $3,000 to the city for sewer hookup. How much should Abreau capitalize to the cost of Land? How much should Abreau capitalize as the cost of the Building? e. Abreau had a older warehouse that was too small for its current needs so they remodeled the warehouse so that it could more efficiently store their inventory. The cost of remodeling the warehouse was $25,000. Additionally, Abreau paid $2,000 for deep cleaning of the warehouse door and $1,500 for annual pest control at the warehouse. How much should Abreau capitalize to the building account? Required: Answer each of the questions posed above. Problem 4 – Intangibles
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Zimmerman Company had the following transactions related to its intangibles account. a. On January 1, 2016, Zimmerman purchased Hollyhock Industries for $8,050,000. The book value of Hollyhock’s net assets was $6,200,000 and the fair value of Hollyhock’s net assets was the same, except for the Building account, which was deemed to be undervalued by $120,000 and the Inventory account, which was deemed to be overvalued by $10,000. b. In 2016, Zimmerman finalized the development of a special hair-growth tonic. Throughout the year 2016, Zimmerman spent $380,000 designing alternatives and putting the product through final testing and $220,000 on a machine that was used to mix the chemicals for the hair tonic. This machine cannot be used for other projects in Zimmerman’s business line. On July 1, 2016, Zimmerman spent $155,000 in legal fees to register and secure the patent for the hair formula. Required: 1.How much should Zimmerman capitalize for each asset on its Balance Sheet? 2.How would Zimmerman account for the machinery in part (b) if it had an alternative use outside of the current project?
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  • Summer '09
  • BAKER
  • Accounting, Depreciation, Expense, Generally Accepted Accounting Principles, Stinson Company, Abreau

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