Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had...
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Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $118,950. The seller agreed to allow a 4.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,590. Southwest Milling had to hire a specialist to calibrate the loader. The specialists fee was $990. The loader operator is paid an annual salary of $44,420. The cost of the companys theft insurance policy increased by $1,580 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $7,600.
Required
Determine the amount to be capitalized in the asset account for the purchase of the front-end loader. (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
Answer & Explanation
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