Business, 07.04.2020 19:56, annamerryberry1016

Costs of Acquiring Fixed Assets

Melinda Stoffers owns and operates ABC Print Co. During February, ABC Print Co. incurred the following costs (1-12 below) in acquiring two printing presses. One printing press was new, and the other was bought from a business that recently filed for bankruptcy.

a. Indicate which costs incurred in acquiring the new printing press (1-6 below) should be debited to the asset account.

Item Debited to asset account
1. Fee paid to factory representative for installation Yes or No
2. Freight Yes or No
3. Insurance while in transit
Yes or No

4. New parts to replace those damaged in unloading Yes or No
5. Sales tax on purchase price Yes or No
6. Special foundation Yes or No

b. Indicate which costs incurred in acquiring the used printing press (7-12 below) should be debited to the asset account.

Item Debited to asset account
7. Fees paid to attorney to review purchase agreement Yes or No
8. Freight Yes or No
9. Installation Yes or No
10. Repair of damage incurred in reconditioning the press Yes or No
11. Replacement of worn-out parts Yes or No
12. Vandalism repairs during installation Yes or No

Answers: 1

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Costs of Acquiring Fixed Assets

Melinda Stoffers owns and operates ABC Print Co. During...