Can you please help me with the following question. I don't understand capitalizing costs. I don't know which costs can be capitalized and which have to be expensed.
Grab Manufacturing Co. purchased a ten-ton draw press at a cost of $18,000 with terms 5/15 n/45. Paymnt was made within the discount period. Shipping costs were $4600 which included $200 for insurance in transit. Installation costs totaled $12000 which included $4000 for taking out a section of a wall and rebuilding it because the press was too large for the doorway. The capitalized cost of the ten-ton draw press is:© BrainMass Inc. brainmass.com June 3, 2020, 6:27 pm ad1c9bdddf
A capital expenditure is an expenditure to acquire a long-term asset -- one that results in depreciation over the life of that asset.
Capital expenditures include the ...
This explains the steps to compute the capitalizing costs