Question
Woodward Company purchased a new piece of equipment to use in its business. The details of the purchase and related costs are as follows: 1.
| Woodward Company purchased a new piece of equipment to use in its business. The details of the purchase and related costs are as follows: |
| 1. | Purchase price of equipment | $70,000 |
| 2. | Installation of equipment | 6,000 |
| 3. | Freight costs (FOB shipping point) | 1,000 |
| 4. | Annual salary of new employee hired to operate the equipment | 20,000 |
| 5. | Increase in the annual cost of the fire and theft insurance policy to cover the new equipment | 500 |
Determine the amount to be capitalized for this equipment. |
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Fundamental Accounting Principles
Authors: John Wild, Ken Shaw, Barbara Chiappetta
19th Edition
0077303202, 9780077303204
