Question

A company purchased new equipment for $80,000. The company paid cash for the equipment. Other costs associated with the equipment were: transportation costs, $2,000; sales tax paid $7,000; and installation cost, $4,500. The cost recorded for the equipment was:

Answer 1

Answer:

$93,500

Explanation:

Given that,

Purchased new equipment for cash = $80,000

Transportation costs = $2,000

Sales tax paid = $7,000

Installation cost = $4,500

Cost of equipment:

= Cash purchase price + Transportation cost + Sales tax paid + Installation cost

= $80,000 + $2,000 + $7,000 + $4,500

= $93,500

Therefore, the cost recorded for the equipment was $93,500.