Solution-Determine the amount to be capitalized in the

Determine the amount to be capitalized in the asset account

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Reference no: EM132758495

Question: Determining the cost of an asset

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 teems 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 lift and an expected salvage value of $6,000.

Required: Determine the amount to be capitalized in the asset account for the purchase of the front-end loader.

Reference no: EM132758495

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Determine the amount to be capitalized in the asset account

Reference no: EM132758495

Reference no: EM132758495

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