Acquisition of Assets for Moon Co. Inc
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Moon Co. Inc., made several purchases of long-term assets in 2009. The details of each purchase are presented here.
New Office Equipment
1. List price: $60,000; terms: 2/10 n/30; paid within discount period.
2. Transportation-in: $1,600
3. Installation: $2,200
4. Cost to repair damage during unloading: $1,000
5. Routine maintenance cost after six months: $300
Basket Purchase of Copier, Computer, and Scanner for $15,000 with Fair Market Values
1. Copier: $10,000
2. Computer: $6,000
3. Scanner: $4,000
Land for New Warehouse With an Old Building Torn Down
1. Purchase price, $200,000
2. Demolition of building, $10,000
3. Lumber sold from old building, $7,000
4. Grading in preparation for new building, $14,000
5. Construction of new building, $500,000
Required:
In each of these cases, determine the amount of cost to be capitalized in the asset account.
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Solution Summary
The solution examines acquisition of assets for Moon Co. Inc. The amount of cost to be capitalized in the asset account is determined.
Solution Preview
New Office Equipment
List price $60,000
Less: Discount $(1,200)
Purchase cost $58,800
Transportation - In $1,600
Installation $2,200
Costs to be ...
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