Chapter 6, Problem 22P

Accounting for acquisition of assets, including a basket purchase

Trinkle Company made several purchases of long-term assets in 2018. The details of each purchase are presented here.

New Office Equipment

1. List price: $60,000; terms: 2/10, n/30; paid within the discount period.

2. Transportation-in: $1,500.

3. Installation: $2,500.

4. Cost to repair damage during unloading: $650.

5. Routine maintenance cost after eight months: $350.

Basket Purchase of Copier, Computer, and Scanner for $30,000 with Fair Market Values

1. Copier, $22,000.

2. Computer, $10,000.

3. Scanner, $8,000.

Land for New Warehouse with an Old Building Torn Down

1. Purchase price, $250,000.

2. Demolition of building, $18,000.

3. Lumber sold from old building, $6,000.

4. Grading in preparation for new building, $22,000.

5. Construction of new building, $510,000.

Required

In each of these cases, determine the amount of cost to be capitalized in the asset accounts.