Calculate capitalized cost and depreciation expense. (LO 1, 2)

Acme Print Shop purchased a new printing press in 2007 . The invoice price was \(\$ 158,500\), but the manufacturer of the press gave Acme a \(2 \%\) discount for paying cash for the machine on delivery. Delivery costs amounted to \(\$ 1,500\), and Acme paid \(\$ 500\) for a special insurance policy to cover the press while in transit. Installation cost was \(\$ 1,350\), and Acme spent \(\$ 3,000\) training the employees to use the new press. Additionally, Acme hired a new supervisor at an annual salary of \(\$ 65,000\) to be responsible for keeping the press online during business hours.

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a. What amount should be capitalized for this new asset?

b. To calculate the depreciation expense for 2007, what other information do you need? Do you think the company should gather this information before purchasing the asset? Why or why not?