Question

E9-1B. Acquisition Cost of Long-Lived Asset Derrick Construction purchased a used front-end loader for $32,000, terms 2/10, n/30, F.O.B. shipping point, freight collect. Derrick paid the freight charges of $330 and sent the seller a check for $31,360 one week after the machine was delivered. The loader required a new battery, which cost Fischer $180. Derrick also spent $240 to have the company name printed on the loader and $375 for one year's insurance coverage on it. Derrick hired a new employee to operate it at a wage of $20 per hour; the employee spent one morning (eight hours) practicing with the machine and went to work at a construction site that afternoon. Calculate the amount at which the front-end loader should be reported on the company 's balance sheet.

Answer 1

Description Cost of front loader less discount Add: Freight Paid Add: Cost of new battery for loader Add: Cost for printing company name on loader| Reported value of Front end loader Amount $31,360 $330 $180 $240 $32,110