Rodgers Company purchased equipment and these costs were incurred: $$\begin{array} { l r }
\text { Cash price } & \$ 55,000 \
\text { Sales taxes } & 3,600 \
\text { Insurance during transit } & 640 \
\text { Installation and testing } & 860 \
\text { Total costs } & \$ 60,100
\end{array}$$ Rodgers will record the acquisition cost of the equipment as

Question

Rodgers Company purchased equipment and these costs were incurred: $$\begin{array} { l r } 
\text { Cash price } & \$ 55,000 \
\text { Sales taxes } & 3,600 \
\text { Insurance during transit } & 640 \
\text { Installation and testing } & 860 \
\text { Total costs } & \$ 60,100
\end{array}$$ Rodgers will record the acquisition cost of the equipment as

Quizplus · Accepted Answer

The acquisition cost of equipment includes all costs necessary to acquire the asset and prepare it for use, which includes the cash price, sales taxes, insurance during transit, and installation and testing. Therefore, the total cost is $60,100.

Rodgers Company Purchased Equipment and These Costs Were Incurred Rodgers Will Record the Acquisition Cost of the Equipment as