Chapter 8, Problem 3E

Summary Introduction

Introduction: The cost of fixed assets includes the purchase price of asset and all the expenses incurred for installing asset and making the asset to be operationalize. All the expenses of freight, additional cost incurred at the time of purchase of asset is added in the cost of the asset to be recorded.

Appraisal value of an asset involves the evolution of the value of asset on the basis of different parameters.

To prepare: Thejournal entry to record the cost of the asset and allocation of cost to the three assets.