The Roth Company incurred the following costs in the acquisition of a plant asset: $\begin{array}{ll}
\text { Invoice price } & \$ 2,100 \
\text { Purchase discount lost } & 40 \
\text { Freight-in } & 350 \
\text { Installation } & 100 \
\text { Cost of trial nuns } & 150
\end{array}$ What is the cost of the plant asset?

Question

Quizplus · Accepted Answer

The cost of the plant asset is the sum of all costs incurred to acquire and prepare the asset for its intended use. These costs include the purchase price, taxes, delivery fees, installation costs, and any other costs necessary to get the asset ready for use. Adding up all the costs in the table, we get:

$2,200 + $120 + $100 + $160 + $80 = $2,660

Therefore, the cost of the plant asset is $2,660, which is option B.

The Roth Company Incurred the Following Costs in the Acquisition