Question

Costs of Acquiring Fixed Assets Melinda Stoffers owns and parts print cu Fet e costs in acquiring two printing presses. One printing press was w, and the other purchased from a business that recently filed for bankruptor a. Indicate which costs incurred in acquiring the new printing press (1-6 w ho debited to the asset account Item Debited to asset cu 1. Fee paid to factory representative for installation 2. Freight 3. Insurance while in transit 4. New parts to replace those damaged in unloading 5. Sales tax on purchase price 6. Special foundation b. Indicate which costs incurred in acquiring the used printing press (7-12 below debited to the asset account Item Debited to set account 7. Fees paid to attorney to review purchase agreement 8. Freight 9. Installation 10. Repair of damage incurred in reconditioning the press 11. Replacement of wom-out parts 12. Vandalism repairs during installation Chede My Work wees remain

Answer 1

Answer (a) Indicate which costs incurred in acquiring the new printing press (l-6 below) should be debited to the asset account - Item Debited to asset account 1. Fee paid to factory representative for Installation Debited to asset accom 2. Freight Debited to asset account 3. Insurance while in transit Debited to asset allowed 4. New parts to replace those damaged in unloading Not Debited to ascet 5. sales tax on purchase price Debited to asset al 6. Special foundation Debited to asset alc >(b.) Indicate which costs incurred in acquiring the used printing press (7-12) below) should be debited to the asset account agreement Item Debited to asset account 7. Fees paid to attorney to Teview purchase Not Debited to asset aic Debited to assetak 8. Freight 4. Installation Debited to asset al le Rebair of damage incurred in reconditioning Not Debited to asset aid the press Debited to asset al II. Replacement of worn-out parts 12. Vandalism repairs during installation Not Debited to assetare 0.

Notes: O New parts to replace those damaged in unloading does not result în improvement in asset. It should be treated as Expense. © In case of acqufred used printing press, frees paid to attorney to review purenase agreement, Repairs of damage incurred to reconditioning the press and Vandalism repairs during installation Should also to be treated as Expenses rather than debited to asset aic.