Rains Company purchased equipment on January 1 at a list price of $75,000, with credit terms 2/10, n/30. Payment was made within the discount period. Rains paid $3,750 sales tax on the equipment, and paid installation charges of $1,320. Prior to installation, Rains paid $3,000 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment?
A) $78,750.
B) $81,570.
C) $83,070.
D) $75,750.

Question

Quizplus · Accepted Answer

The total cost includes the discounted purchase price, sales tax, installation charges, and the cost of the concrete slab. The discounted price is $75,000 - ($75,000 * 0.02) = $73,500. Adding sales tax ($3,750), installation charges ($1,320), and the concrete slab cost ($3,000) gives a total of $81,570.

Rains Company Purchased Equipment on January 1 at a List