Angie's Blooms purchased a delivery van with a list price of $40000. The company was given a $4000 cash discount by the dealer and paid $2000 sales tax. Annual insurance on the van is $1000. As a result of the purchase by how much will Angie's Blooms increase its van account?
A) $40000
B) $36000
C) $39000
D) $38000

Question

Quizplus · Accepted Answer

The amount that Angie's Blooms actually paid for the van is calculated as follows: 
List price: $40,000 
Cash discount: -$4,000 
Sales tax: +$2,000 
Total cost: $38,000

In addition to the cost of the van, the annual insurance premium of $1,000 should also be included in the calculation.

Therefore, the total increase to Angie's Blooms' van account is $39,000 ($38,000 + $1,000). The correct answer is D.

Angie's Blooms Purchased a Delivery Van with a List Price