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Costs of acquiring fixed assets Melinda Stoffers owns and operates ABC Print Co. During February, ABC incurred the following costs in acquiring two printing presses. One printing press was new, and the other was purchased from a business that recently filed for bankruptcy. Costs related to new printing press: 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 Costs related to used printing press: 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 worn-out parts 12. Vandalism repairs during installation a. Indicate which costs incurred in acquiring the new printing press should be debited to the asset account. b. Indicate which costs incurred in acquiring the used printing press should be debited to the asset account.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 10, Problem 10.1EX
Textbook Problem

Costs of acquiring fixed assets

Melinda Stoffers owns and operates ABC Print Co. During February, ABC incurred the following costs in acquiring two printing presses. One printing press was new, and the other was purchased from a business that recently filed for bankruptcy.

Costs related to new printing press:

  1. 1. Fee paid to factory representative for installation
  2. 2. Freight
  3. 3. Insurance while in transit
  4. 4. New parts to replace those damaged in unloading
  5. 5. Sales tax on purchase price
  6. 6. Special foundation

Costs related to used printing press:

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 worn-out parts

12.    Vandalism repairs during installation

  1. a. Indicate which costs incurred in acquiring the new printing press should be debited to the asset account.
  2. b. Indicate which costs incurred in acquiring the used printing press should be debited to the asset account.

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Chapter 10 Solutions

Accounting
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