Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $116,440. The seller agreed to allow a 4.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,680 Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,130. The loader operator is paid an annual salary of $32,250. The cost of the company's theft insurance policy increased by $1,670 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $7,200 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.

Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $116,440. The seller agreed to allow a 4.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,680 Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,130. The loader operator is paid an annual salary of $32,250. The cost of the company's theft insurance policy increased by $1,670 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $7,200 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.

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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Southwest Milling Company purchased a front-end loader to move stacks of lumber The loader had a list price of $116,440. The seller
agreed to allow a 4.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost
amounted to $2,680 Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,130. The loader
operator is paid an annual salary of $32,250. The cost of the company's theft insurance policy increased by $1,670 per year as a result
of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $7,200
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
$
0

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