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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 $118,820. The seller agreed to allow a 6.00 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,430. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,190. The loader operator is paid an annual salary of $10,780. The cost of the company's theft insurance policy increased by $1,710 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $6,200. 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.) Costs that are to be capitalized: List price Total costs $ 0 Required A Required B Record the purchase in general journal format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar.) View transaction list Journal entry worksheet < A B C Record purchase of equipment for cash. Note: Enter debits before credits. Event 1 General Journal Debit Credit: Record entry Clear entry View general journal

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 $118,820. The seller agreed to allow a 6.00 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,430. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,190. The loader operator is paid an annual salary of $10,780. The cost of the company's theft insurance policy increased by $1,710 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $6,200. 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.) Costs that are to be capitalized: List price Total costs $ 0 Required A Required B Record the purchase in general journal format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar.) View transaction list Journal entry worksheet < A B C Record purchase of equipment for cash. Note: Enter debits before credits. Event 1 General Journal Debit Credit: Record entry Clear entry View general journal

Financial Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter2: Asset And Liability Valuation And Income Recognition
Section: Chapter Questions
Problem 5QE
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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 $118,820. The seller agreed to allow a 6.00 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,430. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,190. The loader operator is paid an annual salary of $10,780. The cost of the company's theft insurance policy increased by $1,710 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $6,200. 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.) Costs that are to be capitalized: List price Total costs $ 0 <Required A Required B >
Transcribed Image Text: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 $118,820. The seller agreed to allow a 6.00 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,430. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,190. The loader operator is paid an annual salary of $10,780. The cost of the company's theft insurance policy increased by $1,710 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $6,200. 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.) Costs that are to be capitalized: List price Total costs $ 0 <Required A Required B >
Required A Required B Record the purchase in general journal format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar.) View transaction list Journal entry worksheet < A B C Record purchase of equipment for cash. Note: Enter debits before credits. Event 1 General Journal Debit Credit: Record entry Clear entry View general journal
Transcribed Image Text:Required A Required B Record the purchase in general journal format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar.) View transaction list Journal entry worksheet < A B C Record purchase of equipment for cash. Note: Enter debits before credits. Event 1 General Journal Debit Credit: Record entry Clear entry View general journal
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