Question
Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $123,550. The seller agreed to allow
Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $123,550. The seller agreed to allow a 6.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,850. Southwest Milling had to hire a specialist to calibrate the loader. The specialists fee was $760. The loader operator is paid an annual salary of $20,030. The cost of the companys theft insurance policy increased by $2,260 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $6,600. Required a. Determine the amount to be capitalized in an asset account for the purchase of the front-end loader.(Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign.)
Costs that are to be capitalized: List price Total costs Required a. Determine the amount to be capitalized in an asset account for the purchase of the front-end loader. (Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign.) Costs that are to be capitalized: List price Add: Discount Less: Discount Required a. Determine the amount to be capitalized in an asset account for the purchase of the front-end loader. (Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign.) Costs that are to be capitalized: List price Cash $ 0 Freight cost Saw equipment Specialist fee Costs that are to be capitalized: List price Cash 0 Freight cost Saw equipment Specialist fee Costs that are to be capitalized: List price Cash Freight cost Saw equipment Specialist fee Cash Freight cost Saw equipment Specialist fee Total costsStep by Step Solution
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