Denver Co.acquired a large rotary forge to be used in its manufacturing process from a competitor that was going out of business.The following costs were incurred by Denver in connection with the acquisition:
$\begin{array}{lr}
\text { List price } & \$ 375,000 \
\text { Finder's fee } & 1,500 \
\text { Transportation to Denver's plant } & 13,000 \
\text { Cleaning and repainting the forge } & 1,800 \
\text { Installation costs } & 21,000 \
\text { Costs to repair a control panel damaged during installation } & 900
\end{array}$
Required:
How much should Denver Co.capitalize to the machinery account?

Question

Denver Co.acquired a large rotary forge to be used in its manufacturing process from a competitor that was going out of business.The following costs were incurred by Denver in connection with the acquisition:
$\begin{array}{lr}
\text { List price } & \$ 375,000 \
\text { Finder's fee } & 1,500 \
\text { Transportation to Denver's plant } & 13,000 \
\text { Cleaning and repainting the forge } & 1,800 \
\text { Installation costs } & 21,000 \
\text { Costs to repair a control panel damaged during installation } & 900
\end{array}$ 
Required:
How much should Denver Co.capitalize to the machinery account?

Quizplus · Accepted Answer

The Answer of Denver Co.acquired a large rotary forge to be used in its manufacturing process from a competitor that was going out of business.The following costs were incurred by Denver in connection with the acquisition:
$\begin{array}{lr}
\text { List price } & \$ 375,000 \
\text { Finder's fee } & 1,500 \
\text { Transportation to Denver's plant } & 13,000 \
\text { Cleaning and repainting the forge } & 1,800 \
\text { Installation costs } & 21,000 \
\text { Costs to repair a control panel damaged during installation } & 900
\end{array}$ 
Required:
How much should Denver Co.capitalize to the machinery account?

Denver CoAcquired a Large Rotary Forge to Be Used in Its