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 $122,110. The seller agreed to allow a 4.50 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point Freight cost amounted to $2,750. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $760. The loader operator is paid an annual salary of $39,720. The cost of the company's theft insurance policy increased by $1,700 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $12,200. Required a. Determine the amount to be capitalized in an asset account for the purchase of the loader. b. Record the purchase in general journal format. Complete this question by entering your answers in the tabs below. Required A Required B Determine the amount to be capitalized in an asset account for the purchase of the loader. (Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign.)

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 $122,110. The seller agreed to allow a 4.50 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point Freight cost amounted to $2,750. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $760. The loader operator is paid an annual salary of $39,720. The cost of the company's theft insurance policy increased by $1,700 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $12,200. Required a. Determine the amount to be capitalized in an asset account for the purchase of the loader. b. Record the purchase in general journal format. Complete this question by entering your answers in the tabs below. Required A Required B Determine the amount to be capitalized in an asset account for the purchase of the loader. (Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign.)

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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