Payne Company purchased equipment on account on September 3,


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Payne Company purchased equipment on account on September 3, 2012, at an invoice price of $196,000. On September 4, 2012, it paid $4,900 for delivery of the equipment. A one-year, $1,975 insurance policy on the equipment was purchased on September 6, 2012. On September 20, 2012, Payne paid $3,100 for installation and testing of the equipment. The equipment was ready for use on October 1, 2012. Payne estimates that the equipment’s useful life will be four years, with a residual value of $14,000. It also estimates that, in terms of activity, the equipment’s useful life will be 75,000 units. Payne has a September 30 fiscal year end. Assume that actual usage is as follows: a)¬†Determine the cost of the equipment. # of Units Year Ended September 30 15,560 2013 23,860 2014 20,160 2015 15,620 2016 lo28t
posted a question · Dec 07, 2015 at 9:45pm

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