mpany pur agreed to allow a 5.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,700. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $800. The loader operator is paid an annual salary of $29,960. The cost of the company's theft insurance policy increased by $1,570 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $13,000. Required Determine the amount to be capitalized in the 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.
mpany pur agreed to allow a 5.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,700. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $800. The loader operator is paid an annual salary of $29,960. The cost of the company's theft insurance policy increased by $1,570 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $13,000. Required Determine the amount to be capitalized in the 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $123,870. The seller
agreed to allow a 5.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost
amounted to $2,700. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $800. The loader
operator is paid an annual salary of $29,960. The cost of the company's theft insurance policy increased by $1,570 per year as a result
of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $13,000.
Required
Determine the amount to be capitalized in the 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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