Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $124,360. The seller agreed to allow a 5.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transportation cost amounted to $2,440. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $990. The loader operator is paid an annual salary of $35,730. The cost of the company's theft insurance policy increased by $1,630 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $8,800. Required: Determine the amount to be capitalized in an 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

Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $124,360. The seller agreed to allow a 5.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transportation cost amounted to $2,440. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $990. The loader operator is paid an annual salary of $35,730. The cost of the company's theft insurance policy increased by $1,630 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $8,800. Required: Determine the amount to be capitalized in an 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

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 12EA: Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a...

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