7. On January 1, 2020 Gingerbread, Corp. purchased a reindeer merry-go-round as an attraction to draw customers during the holiday season. The following information is available:Invoice price$280,000Shipping cost$4,000Set-up cost$2,000Insurance to cover years 2020 and 2021$12,000Necessary repair during set-up500 Determine the amount to be record as the capitalized cost of the asset. a.286,000b.280,000c.286,500d.298,500

Capitalized Cost of Asset included all those expenses which are incurred to make the asset ready to…

Answered: On January 1, 2020 Gingerbread, Corp.…

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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7. On January 1, 2020 Gingerbread, Corp. purchased a reindeer merry-go-round as an attraction to draw customers during the holiday season. The following information is available:

Invoice price	$280,000
Shipping cost	$4,000
Set-up cost	$2,000
Insurance to cover years 2020 and 2021	$12,000
Necessary repair during set-up	500

Determine the amount to be record as the capitalized cost of the asset.

a.286,000

b.280,000

c.286,500

d.298,500

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