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Question - Southwest Milling Co. purchased a front - end loader to move stacks of lumber. The loader had a list price of $140,000. The seller agreed to allow a 4 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $1,200. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,800. The loader operator is paid an annual salary of $60,000. The cost of the company's theft insurance policy increased by $ 800 per year as a result of acquiring the loader. The loader had a four - year useful life and an expected salvage value of $6,000.
Required - Determine the amount to be capitalized in an asset account for the purchase of the loader.
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