Shay Company made several purchases of long-term assets in 2014. The details of
ID: 2422905 • Letter: S
Question
Shay Company made several purchases of long-term assets in 2014. The details of each purchase are presented here. New Office Equipment 1. List price: $42,200; terms: 1/10, n/30; paid within the discount period. 2. Transportation-in: $770. 3. Installation: $540. 4. Cost to repair damage during unloading: $522. 5. Routine maintenance cost after eight months: $150. Basket Purchase of Office Furniture, Copier, Computers, and Laser Printers for $48,300 with Fair Market Values 1. Office furniture, $23,862. 2. Copier, $8,730. 3. Computers and printers, $25,608. Land for New Headquarters with Old Barn Torn Down 1. Purchase price, $78,500. 2. Demolition of barn, $5,140. 3. Lumber sold from old barn, $2,570. 4. Grading in preparation for new building, $8,400. 5. Construction of new building, $255,000. Required In each of these cases, determine the amount of cost to be capitalized in the asset accounts.
ASSETT & ALLOCATED COST (2 columns)
a. Basket purchase
b. Office furniture
c. Copier
d. Computers and printers
Total:
f. Cost of land
g. Construction cost
Explanation / Answer
Asset and allocated cost
Basket purchase 48300 Office furniture 23862 Copier 8730 Computer and printers 25608 Total 106500 Cost of land 78500 Construction cost 255000