1) Cost of a Capital Asset a) Calculate the cost of the capital asset and prepare the journal entries assuming everything was paid on the same day; Purchase Cost 20,000 Freight Cost 500 Electrical Connections 2,000 Concrete Pad 1,000 Purchase Discount (1,500) Damage (from dropping machine during hook-up) 5,000 Cost to test Machine (to get it ready) 2,000 Cost to adjust (repair) after dropping 1,000 Cost of extra parts for future servicing 6,500 Cost: b) The Jones company purchased land, building and equipment for a total value of $2,000,000. An appraiser valued the assets as follows: Land - $375,000; Building - $900,000; Equipment $225,000. Prepare the journal entry to record the purchase of the assets. (Round your ratios to 2 decimals where necessary. Round your dollar figures to the nearest penny.) c) SmithCo purchased land ($800,000) with an old building on it ($200,000) for a total of $1,000,000. The company planned to demolish the building and replace it with a parking lot for its factory located next door. Demolition costs were $250,000 and the company was able to sell salvage for $40,000. The company then built a new parking lot and associated landscaping for a total of $750,000. Record the above transaction assuming all costs were paid in cash