Question

Schrock Company purchases a new delivery van for $60,000. The sales taxes are $4,500. The logo of the company is painted on the side of the van for $1,200. The van's annual license is $120. The van undergoes safety testing for $220. What does Schrock record as the cost of the new van?

Answer 1

Answer:

Schrock record the $65,920 as the cost of the new van

Explanation:

The computation of cost of the new van is computed below:

= Purchase cost + sales tax + logo cost + safety testing cost

= $60,000 + $4,500 + $1,200 + $220

= $65,920

where,

Purchase cost is $60,000

Sales tax is $4,500

Logo cost is $1,200

Safety testing cost is $220

The van annual license is not included in the cost of new wan. Thus, it is not consider in the computation part.

Hence, Schrock record the $65,920 as the cost of the new van