Lamont Company buys a lift truck with a list price of $20,000.The dealer grants a 15% reduction in list price and an additional two percent cash discount on the net price if payment is made in 30 days.Sales taxes amount to $250 and the company paid an extra $200 to have a special horn installed.What should be the recorded cost of the truck?

Question

Quizplus · Accepted Answer

The correct answer is C.The net price of the truck is $20,000 * (1 - 0.15) = $17,000. The cash discount is $17,000 * 0.02 = $340. The total cost of the truck is $17,000 - $340 + $250 + $200 = $17,110.

Lamont Company Buys a Lift Truck with a List Price