### Problem 4The Bay View Restaurant has purchased a new dishwasher for its own use.#### Required:Using the following information, determine the proper amount to be capitalized in the asset account Equipment.- **Invoice price of equipment**: $8,000- **Cash discount allowed: 2% of invoice**: $160- **Freight-in paid**: $300- **Speeding ticket given to our truck driver while the driver was delivering equipment**: $25- **Installation costs**: $150- **Sales tax on purchase**: $308- **Repair of damages due to equipment being dropped off truck**: $200### Explanation:To determine the amount to be capitalized, you should consider all necessary expenditures to acquire the asset and prepare it for its intended use. This typically includes the invoice price, minus any discounts, plus freight-in, installation, and sales taxes. Incidental costs like speeding tickets or repairs from mishandling are usually expensed as incurred and not capitalized.

Name: ### Problem 4The Bay View Restaurant has purchased a new dishwasher f
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Description: ### Problem 4The Bay View Restaurant has purchased a new dishwasher for its own use.#### Required:Using the following information, determine the proper amount to be capitalized in the asset account Equipment.- **Invoice price of equipment**: $8,000-

Costs thats are directly related to the asset will be capitalised.

Business

Accounting

The Bay View Restaurant has purchased a new dishwasher for its own use. Required: Using the following information, determine the proper amount to be capitalized in the asset account Equipment. $8,000 Invoice price of equipment Cash discount allowed: 2% of invoice ol 160 Freight-in paid Speeding ticket given to our truck driver while the driver was delivering equipment 300 25 Installation costs 150 Sales tax on purchase Repair of damages due to equipment being dropped off truck 308 200

The Bay View Restaurant has purchased a new dishwasher for its own use. Required: Using the following information, determine the proper amount to be capitalized in the asset account Equipment. $8,000 Invoice price of equipment Cash discount allowed: 2% of invoice ol 160 Freight-in paid Speeding ticket given to our truck driver while the driver was delivering equipment 300 25 Installation costs 150 Sales tax on purchase Repair of damages due to equipment being dropped off truck 308 200

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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