On January 1, 2024, Syth, Inc. purchased several industrial forklifts for use in its warehouse. The forklifts had a list price of $215,000. The seller agreed to allow a 3.00 percent discount because Syth, Inc. paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $1,650. Syth had to hire a specialist to retrofit the forklifts to meet local safety regulations. The specialists fee was $500. The forklift drivers are paid a combined annual salary of $95,800. The cost of the companys theft insurance policy increased by $3,800 per year as a result of acquiring the forklifts. The forklifts have a five-year useful life and an expected salvage value of $2,200.

Required

a. Determine the amount to be capitalized in an asset account for the purchase the forklifts.

b. Record the purchase in general journal format, creating one journal entry for all costs combined and assumed cash is paid.

Using the above information from Syth, Inc., assume the forklifts are sold for $69,500 cash on March 1, 2027.

Required

a. Calculate the amount of gain or loss Syth incurs.

b. Record the sell in general journal format.

On January 1, 2024, Hugo Enterprises paid cash to acquire the assets of an existing company. Among the assets acquired were the following items. Patent $55,000 (remaining life 4 years) Goodwill $44,500 Hugo's financial condition just prior to the acquisition of these assets is shown in the following statements model.

Required:

a. Compute the annual amortization expense for these items.

b. Show the acquisition of the intangible assets.

c. Show the related amortization expense for Year 1 in a horizontal statements model.