Answer:
The cost of equipment = $127,650
Explanation:
<em>According to International Accounting Standards (IAS) 16, property plants and equipment, the cost of land includes all of the cost necessary to bring and make it ready for the intended use. </em>
<em>These costs include purchase cost, fees and commission associated with the purchase transaction. </em>
Here in this question the installation charges, sales taxes and the cost of concrete slab all fall within the definition of IAS 16
The quotation 4/10, n/30 implies that if payment is made within =10 days, Crane would get 4% off the initial purchase price.
Since the payment was made within the discounted period, the net purchase price would be
Purchase price = 120,000 - (4%× 120,000)= 115,200
The cost of equipment = 115,200 +4,750 + 2,100 + 5600= 127650
The cost of equipment = $127,650
