Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $118,380. The s agreed to allow a 5.50 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transpor cost amounted to $2,900. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $850. The loa operator is paid an annual salary of $13,170. The cost of the company's theft insurance policy increased by $1,980 per year as a re of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,600. 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
Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $118,380. The s agreed to allow a 5.50 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transpor cost amounted to $2,900. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $850. The loa operator is paid an annual salary of $13,170. The cost of the company's theft insurance policy increased by $1,980 per year as a re of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,600. 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
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 12EA: Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a...
Related questions
Question
![Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $118,380. The seller
agreed to allow a 5.50 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transportation
cost amounted to $2,900. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $850. The loader
operator is paid an annual salary of $13,170. The cost of the company's theft insurance policy increased by $1,980 per year as a result
of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,600.
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
$
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6054c960-210d-4baa-a5e5-f53f1dc610d3%2F9de6069b-152e-46ea-806c-50596c2a928e%2F0xo0wv_processed.png&w=3840&q=75)
Transcribed Image Text:Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $118,380. The seller
agreed to allow a 5.50 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transportation
cost amounted to $2,900. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $850. The loader
operator is paid an annual salary of $13,170. The cost of the company's theft insurance policy increased by $1,980 per year as a result
of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,600.
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
$
0
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College