Rains Company purchased equipment on January 1 at a list price of $125000 with a 2% discount if payment is made within a 10-day discount period.Payment was made within the discount period.Rains paid $6250 sales tax on the equipment and paid installation charges of $2200.Prior to installation Rains paid $5000 to pour a concrete slab on which to place the equipment.What is the total cost of the new equipment?
A)$131250.
B)$135950.
C)$138450.
D)$126250.

Question

Quizplus · Accepted Answer

The total cost of the equipment includes the purchase price after discount, sales tax, installation charges, and the cost of the concrete slab. The discounted price is $125,000 - ($125,000 * 2%) = $122,500. Adding the sales tax ($6,250), installation charges ($2,200), and concrete slab cost ($5,000) gives a total cost of $135,950.

Rains Company Purchased Equipment on January 1 at a List