Question

Tamarisk, Inc. incurs the following expenditures in purchasing a truck: cash price $42,000, accident insurance $2,900, sales taxes $2,700, motor vehicle license $100, and painting and lettering $400. What is the cost of the truck

Answer 1

$44,700

Step-by-step explanation:

The cost of the truck according to IAS 16 under IFRS would only include any cost incurred in bringing the asset to as location or state where it becomes available for use.

Given cost items;

cash price = $42,000

Accident insurance = $2,900

Sales taxes = $2,700

Motor vehicle license = $100

Painting and lettering = $400

From all the cost items stated above, the cost of the truck

= $42,000 + $2,700

= $44,700

Other cost elements will be expensed.