Exercise 6-4A (Static) Determining the cost of an asset LO 6-1Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $140,000. The selleragreed to allow a 4 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight costamounted to $1.200. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,800. The loaderoperator is paid an annual salary of $60,000. The cost of the company's theft insurance policy increased by $800 per year as a resultof acquiring the loader. The loader had a four-year useful life and an expected salvage value of $6,000.RequiredDetermine the amount to be capitalized in the asset account for the purchase of the front-end loader. (Amounts to be deductedshould be indicated with minus sign.)Costs that are to be capitalizedList priceTotal costs Exercise 6-4A (Static) Determining the cost of an asset LO 6-1Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $140,000. The selleragreed to allow a 4 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight costamounted to $1.200. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,800. The loaderoperator is paid an annual salary of $60,000. The cost of the company's theft insurance policy increased by $800 per year as a resultof acquiring the loader. The loader had a four-year useful life and an expected salvage value of $6,000.RequiredDetermine the amount to be capitalized in the asset account for the purchase of the front-end loader. (Amounts to be deductedshould be indicated with minus sign.)Costs that are to be capitalizedList priceTotal costs

Capitalized cost refers to the cost of an asset that a company capitalizes, or records as an asset…

Exercise 6-4A (Static) Determining the cost of an asset LO 6-1 Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $140,000. The seller agreed to allow a 4 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $1.200. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,800. The loader operator is paid an annual salary of $60,000. The cost of the company's theft insurance policy increased by $800 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $6,000. Required Determine the amount to be capitalized in the asset account for the purchase of the front-end loader. (Amounts to be deducted should be indicated with minus sign.) Costs that are to be capitalized List price

Exercise 6-4A (Static) Determining the cost of an asset LO 6-1 Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $140,000. The seller agreed to allow a 4 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $1.200. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,800. The loader operator is paid an annual salary of $60,000. The cost of the company's theft insurance policy increased by $800 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $6,000. Required Determine the amount to be capitalized in the asset account for the purchase of the front-end loader. (Amounts to be deducted should be indicated with minus sign.) Costs that are to be capitalized List price

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exercise 8-4A (Algo) Determining the cost of an asset LO 8-1 Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $120,090. The seller agreed to allow a 4.75 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transportation cost amounted to $2,500. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,100. The loader operator is paid an annual salary of $27,380. The cost of the company's theft insurance policy increased by $1,560 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,100. Required: Determine the amount to be capitalized in an asset account for the purchase of the front-end loader. Note: 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
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