Question

Acquisition Cost of Long-Lived Asset The following data relate to Derrick Construction's purchase of a front-end loader: $32,000 31,360 240 Invoice price, terms 2/10, n/30 F.O.B shipping point, freight collect Sent a check for the front loader, one week later Cost of printing company logo on machine Freight paid Cost of insurance coverage for one year New Battery (needed to prepare the machine for its intended use) Hired new employee to operate it at $20 per hour; the employee spent one morning (eight hours) practicing with the machine and went to work at the construction site that afternoon. 330 375 180 Calculate the amount at which the front-end loader should be reported on the company's balance sheet. Acquisition Cost = $

Answer 1

Acquisition cost	31360
Cost of printing company logo on machine	240
Freight paid	330
New Battery	180
Acquisition Cost	32110

Note: Insurance and Employee salaries are not to be capitalized.