Wonder Mountain Company operates a snow sports resort for skiers and snowboarder

Question

Wonder Mountain Company operates a snow sports resort for skiers and snowboarders. The company has recently decided to replace an existing old chair lift with a new high-speed quad chair and expand the hill to allow for increased capacity. The old chair lift was a $725,000 asset on the books 90% depreciated. The work was completed from April to November. Wonder Mountain incurred the following costs for the expansion: Invoice price high-speed quad chair lift Costs to dismantle old chair ift Cash received for sale used chair lft Shipping costs for delivery Landscape architect fees, grading expansion hill Permit costs Clearing trees/grading land for expansion Installation of concrete bases for chair lift Helicopter rental to install towers for chair lift Labour installation ski ift Training employees on maintenance and operation $1,500,000 27,500 150,000 17,500 6,000 4,000 42,500 90,000 80,000 250,000 7.500 25,000 60,000 30,000 45,000 75,000 Interest costs on loan for construction General overhead costs Annual routine maintenance Purchase tools required for annual maintenance Required Calculate the total cost for each asset a. Land b. Skdi lift c. Tools

Explanation / Answer

**General overhead and annual routine cost are the revenue cost and is not to charged or added to cost of asset

Land Ski lift Tools invoice price 1,500,000 cost to dismantle old lift 27,500 cash received from sale (150,000) shipping cost 17,500 landscape architect fees 6000 permit fees 4000 clearing trees grading 42500 Installation of concrete 90000 Helicopter rentals 80000 labor installation 250000 Training employees 7500 Testing 25000 Interest cost 60000 general overhead annual routine purchase cost of tools 75000 Total cost 52500 1907500 75000

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.