Pacific Printing Company purchased a new printing press. The invoice price was $\$ 158,500$. The company paid for the press within 30 days, so they were allowed a 3 percent discount. The freight to have the press delivered cost $\$ 2,500$. A premium of $\$ 900$ was paid for a special insurance policy to cover the transportation of the press. The company spent $\$ 2,800$ to install the press and anditional $\$ 400$ in star up costs to get the press ready for regular production.

1. At what amount should the press be recorded as an asset?

2. What additional information must be known before the depreciation expense for the first year of operation of the new press can be computed?

3. Interpretive Question: What criterion is used to determine whether the start up costs of $\$ 400$ are included in the cost of the asset? Explain.