Question

Erin Danielle Company purchased equipment and incurred the following costs:

Cash price
$24,000
Sales taxes
1,200
Insurance during transit
200
Installation and testing
400
Total costs
$25,800
What amount should be recorded as the cost of the equipment?

Answer 1

The cost of the equipment should be recorded as $25,800.

Step-by-step explanation:

The cost of the equipment should be recorded as the total costs incurred, which is $25,800. This includes the cash price of $24,000, sales taxes of $1,200, insurance during transit of $200, and installation and testing costs of $400.