Question

Hamlet College recently purchased new computing equipment for its library. The following information refers to the purchase and installation of this equipment.
1. The list price of the equipment was $285,000; however, Hamlet College qualified for an "education discount" of $25,000. It paid $50,000 cash for the equipment, and issued a three-month, 9 percent note payable for the remaining balance. The note, plus accrued interest charges of $4,500, was paid promptly at the note’s maturity date.
2. In addition to the amounts described in 1, Hamlet paid sales taxes of $15,000 at the date of purchase.
3. Freight charges for delivery of the equipment totaled $1,000.
4. Installation costs related to the equipment amounted to $5,000.
5. During installation, one of the computer terminals was accidentally damaged by a library employee. It cost the college $500 to repair this damage. As soon as the computers were installed, the college paid $4,000 to print admissions brochures featuring the library’s new, state-of-the-art computing facilities.

In one sentence, make a general statement summarizing the nature of expenditures that qualify for inclusion in the cost of plant assets such as computing equipment.

Answer 1

Answer:

The amount paid or payable to bring an asset at present location and working condition should be capitalized.

Explanation:

From the given question, it was asked to explain  one sentence, in making  general statement to outline the features of expenditures that qualify for addition in plant assets cost, like computing equipment.

So, the amount payable to get an asset at a current location and in a good working condition should be taken advantage on or capitalized