Acquisition of Assets for Moon Co. Inc
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.
https://brainmass.com/business/mergers-and-acquisitions/acquisition-assets-moon-co-inc-268880
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 ...
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.