Chapter 7, Problem 7.2BP

Determine the acquisition cost of equipment (LO7–1)

Flip Side of P7–8B

Sicily Pizza purchased baking owns from New World Deli. New World Deli was closing its bakery business and sold its three-year-old owns for $341,000. In addition to the purchase price, Sicily Pizza paid shipping costs of $16,000. Employees of Sicily Pizza installed the ovens; labor costs were $17,000. An outside contractor performed some of the electrical work for $3,800. Sicily Pizza consumed pizza dough with a cost of $1,300 in testing the ovens. It then installed new timers on the ovens at a cost of $800 and placed the machines in operation.

  Required:

  1.    Prepare a schedule showing the amount at which Sicily Pizza should record the ovens in the Equipment account.

  2.    Indicate where any amounts not included in the Equipment account should be recorded.