Question

Fogelberg Company purchased equipment for $12,000. Sales tax on the purchase was $600. Other costs incurred were freight charges of $240, repairs of $420 for damage during installation, and installation costs of $270. What is the cost of the equipment?
a $12,000.00
b $13,530.00
c $12,600.00
d $13,110.00

Answer 1

Answer : The correct option is, (d) $13,110.00

Explanation : Given,

Price when company purchased equipment = $12000

Sales tax price = $600

Freight charges = $240

Damage charges = $420

Installation costs = $270

Now we have to determine the total cost of the equipment.

Total cost of the equipment = Purchased price + Sales tax price + Freight charges + Installation costs

Total cost of the equipment = $12000 + $600 + $240 + $270

Total cost of the equipment = $13110.00

Thus, the total cost of the equipment is, $13110.00