Question $7$

On October $11^{st},$ the Bakehouse Company purchased an industrial sized mixer for their manufacturing plant. The

mixer had a list price of $$50,000.$ The seller agreed to allow a $2\%$ discount as Bakehouse paid cash. Delivery terms

were FOB shipping point. Freight cost amounted to $$1,200.$ Bakehouse built a special platform to mount the mixer.

The cost of the platform was $$500.$ An electrician was hired at a cost of $$300$ to install the new mixer. The mixer had

an $8-$year useful life and an expected salvage value of $$3,000.$

a$)$ Determine the amount to be capitalized in an asset account for the purchase of the mixer.

b$)$ Record the journal entry for the purchase of the mixer and the depreciation for the first year.

c$)$ On January $1,$ Year $4,$ Bakehouse sold the mixer for $$40,000$ cash as they realized it wasn't large enough to keep

up with production demands. Record the sale of the mixer and any gain or loss realized.

Question $8$

Al's Appliances is a retailer of major appliances. Record the following transaction for Al's Appliances for the month of

October.

a$)$ Al sold a dishwasher for $$1,500$ cash plus $5$ percent sales tax. The dishwasher had originally cost $Al$$$800.$

Prepare the journal entries related to this transaction.