Trinkle Company made several purchases of long-term assets in 2018. The details of each purchase are presented here.
New Office Equipment
List price: $44,400; terms: 2/10, n/30; paid within the discount period.
Transportation-in: $810.
Installation: $410.
Cost to repair damage during unloading: $495.
Routine maintenance cost after eight months: $250.
Basket Purchase of Copier, Computer, and Scanner for $46,100 with Fair Market Values
Copier, $21,684.
Computer, $6,672.
Scanner, $27,244.
Land for New Warehouse with an Old Building Torn Down
Purchase price, $83,500.
Demolition of building, $5,130.
Lumber sold from old building, $1,230.
Grading in preparation for new building, $10,000.
Construction of new building, $271,000.
Required
In each of these cases, determine the amount of cost to be capitalized in the asset accounts.
Office equipment:
Basket purchase:
Land and building:
Computation of Amount of Cost to be capitalized for Office Equipment | |
Particulars | Amount ($) |
Price | 44400 |
Add : transportation-in | 810 |
Add : Installation | 410 |
Less : Discount ($44400*2%) | -888 |
Total | 44732 |
Computation of Amount of Cost to be capitalized for Building | ||||
Asset | Fair Market Value | Percent of FMV | Purchase | Allocated Cost |
Copier | $21,684 | 39% | $46,100 | $17,979 |
Computers | $6,672 | 12% | $46,100 | $5,532 |
Scanner | $27,244 | 49% | $46,100 | $22,589 |
Total | $55,600 | $46,100 |
Computation of Amount of Cost to be capitalized for Land | |
Assets | Allocated Costs |
Cost of Land (Working Note) | $97,400 |
Construction Costs | $271,000 |
Total Cost | $368,400 |
Working Note :- | |
Purchase Price | $83,500 |
Add : Demolition of Building | $5,130 |
Add : Grading in Preparation for new building | $10,000 |
Less : Lumber sold from old building | ($1,230) |
Total Cost of Land | $97,400 |
Trinkle Company made several purchases of long-term assets in 2018. The details of each purchase are...
Trinkle Company made several purchases of long-term assets in 2018. The details of each purchase are presented here. New Office Equipment List price: $44,500; terms: 2/10, n/30; paid within the discount period. Transportation-in: $840. Installation: $480. Cost to repair damage during unloading: $524. Routine maintenance cost after eight months: $280. Basket Purchase of Copier, Computer, and Scanner for $52,700 with Fair Market Values Copier, $23,495. Computer, $12,065. Scanner, $27,940. Land for New Warehouse with an Old Building Torn Down Purchase...
Trinkle Company made several purchases of long-term assets in 2018. The details of each purchase are presented mere New Office Equipment 1. List price: $40,000: terms: 2/10, 1/30:paid within the discount period. 2. Transportation-inc $840. 3. Insta ation: $480 4. Cost to repair damage during unloading: $456. 5. Routine maintenance cost after eight months: $150. Basket Purchase of copier, Computer, and Scanner for $47,700 with Fair Market Values 1. Copler, $23.575 2. Computer, $9.200. 3. Scanner, $24.725. Land for New...
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Trinkle Co., Inc. made several purchases of long-term assets in Year 1. The details of each purchase are presented here. New Office Equipment 1. List price: $40,500; terms: 2/10 n/30; paid within discount period. 2. Transportation-in: $750. 3. Installation: $550. 4. Cost to repair damage during unloading: $651. 5. Routine maintenance cost after six months: $110. Basket Purchase of Copier, Computer, and Scanner for $47,000 with Fair Market Values 1. Copier, $20,942. 2. Computer, $9,622 3. Scanner, $26,036. Land for...
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