Your company buys a computer system from IBM for $3 million and pays IBM $200,000 to install the computer system.Your company should record:
A)$3 million in equipment,and $200,000 in expenses.
B)$3.2 million in expenses.
C)$2.8 million in equipment and the rest in expenses.
D)$3.2 million in equipment.

Question

Quizplus · Accepted Answer

The total cost of the computer system and installation is $3.2 million, therefore the company should record $3.2 million in equipment. The $200,000 paid to IBM for installation should be included in the cost of the equipment.

Your Company Buys a Computer System from IBM for $3