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Costs of Acquiring Fixed Assets
Melinda Stoffers owns and operates ABC Prin...
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Mathematics, 06.05.2021 03:40, JustTraaash
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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.
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
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
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
8. Freight
9. Installation
10. Repair of damage incurred in reconditioning the press
11. Replacement of worn-out parts
12. Vandalism repairs during installation
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Answers: 3
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