Question

& Fixed and Intangible Assets PPLY WHAT YOU HAVE LEARNED 8-1. Acquisition of assets. ify the costs of the asset. For any costs incurred that are not the following asset, identify the costs of the asset. For an ded in the asset cost, specify how they would be recorded. th Company purchased a new machine for its manufacturing facility. Costs curred in conjunction with this purchase included the following Invoice price $90,000, subject to 2/10, n/30 discount Sales tax 5,400 Freight to ship to Growth 6,000 Transport to factory 1,900 Repair of chip in machine from damage in loading 500 Training of operators 3,600 Lunch for truck driver in transit 25 Make the journal entry to record the incurrence of these costs. Be sure to show calculations for combined amounts. You may credit Cash for the total.

Answer 1

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Growth Company
Only expenses for repairs of chip, Training to operators and for driver's lunch will not be a part of asset cost. These are normal operating exposes.
Journal Entry
Date	General Journal	Debit $	Credit $
	Machine	90,000.00
	Sales Tax	5,400.00
	Freight charges	6,000.00
	Transport charges	1,900.00
	Repairs expense	500.00
	Training expense	3,600.00
	Miscellaneous expense	25.00
	Cash		107,425.00
	(Journal entry for costs incurred.)
	Machine	13,300.00
	Sales Tax		5,400.00
	Freight charges		6,000.00
	Transport charges		1,900.00
	(Journal entry for expenses capitalized.)