Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $119,910. The seller agreed to allow a 4.75 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,180. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,110. The loader operator is paid an annual salary of $42,080. The cost of the company's theft insurance policy increased by $2,220 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,000. Required Determine the amount to be capitalized in the 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.

Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $119,910. The seller agreed to allow a 4.75 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,180. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,110. The loader operator is paid an annual salary of $42,080. The cost of the company's theft insurance policy increased by $2,220 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,000. Required Determine the amount to be capitalized in the 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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