Xpert Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list
Question:
Xpert Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of \(\$ 100,000\). The seller agreed to allow a 4 percent discount because Xpert Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to \(\$ 500\). Xpert Milling had to hire a consultant to train an employee to operate the loader. The training fee was \(\$ 1,000\). The loader operator is paid an annual salary of \(\$ 30,000\). The cost of the company's theft insurance policy increased by \(\$ 800\) per year as a result of acquiring the loader. The loader had a fouryear useful life and an expected salvage value of \(\$ 6,500\).
Required
a. Determine the amount to be capitalized in an asset account for the purchase of the loader.
b. Record the purchase in general journal format.
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