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(Accounting for Self-Constructed Assets) Troopers Medical Labs, Inc., began operations 5 years ago producing stetrics, a new type of instrument it hoped to sell to doctors, dentists, and hospitals. The demand for stetrics far exceeded initial expectations, and the company was unable to produce enough stetrics to meet demand. The company was manufacturing its product on equipment that it built at the start of its operations. To meet demand, more efficient equipment was needed. The company decided to design and build the equipment, because the equipment currently available on the market was unsuitable for producing stetrics. In 2010, a section of the plant was devoted to development of the new equipment and a special staff was hired. Within 6 months a machine developed at a cost of $714,000 increased production dramatically and reduced labor costs substantially. Elated by the success of the new machine, the company built three more machines of the same type at a cost of $441,000 each. Instructions (a) In general, what costs should be capitalized for self-constructed equipment?
(b) Discuss the propriety of including in the capitalized cost of self-constructed assets:
Elucidate the difference in operating income for January, February, and March under variable costing and absorption costing.
Del's Diner anticipated that 84,000 process hours would be worked during an upcoming accounting period when, in fact, 90,000 hours were actually worked. Illustrate what is Del's flexible budget for the preceding cost formula?
Compute the cost of civilian and military versions of Model KV10 using both direct labor dollars and machine hours as alternative allocation bases. Explain why Pelton Instruments may decide to use direct labor as an overhead allocation base.
Factory X produces a single product which is made from 10 kg of Material A as well as 5 kg of Material B. These quantities allow for waste The purchase prices of these materials
Using the subsequent information from Alfred's year 1, year 2, and year 3 Schedule K-1, determine his tax basis the end of year 2 and year 3.
From data calculate the inventory value in the Balance sheet - determine the amount that should appear on Oliva's balance sheet at December 31, 2007, for inventory.
Preparation of journal entries, adjusted trial balance and classified balance sheet - Prepare journal entries for the transactions listed above and adjusting entries. and prepare an adjusted trial balance at January 31, 2007
The truck is expected to last six years and has a salvage value of $2,200. The company's annual accounting period ends on December 31. What is the depreciation expense for the current year, assuming the straight-line method is used?
Construct NPV profiles for Project A and B.
he present value of an annuity due of 1 for 6 years at 12 percent is 4.6048, what is the lease liability that Stockton should report on the balance sheet at December 31, 2008?
Evaluate subsequent income and expenses
Explain why the accounting treatment is different in the general Fund and governmental activities general journals.
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