The Roger's Company incurred the following costs in the acquisition factory production equipment: Invoice price $\quad $ $\quad $$2,675
Purchase discount lost $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ 75
Freight-in $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ 400
Installation $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $750
Cost of trial runs $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $150
What is the capitalizable cost of the equipment?

Question

The Roger's Company incurred the following costs in the acquisition factory production equipment: Invoice price  $\quad $ $\quad $$2,675 
Purchase discount lost $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ 75
Freight-in  $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ 400
Installation  $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $750
Cost of trial runs  $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $  $\quad $150
What is the capitalizable cost of the equipment?

Quizplus · Accepted Answer

The capitalizable cost includes all costs necessary to acquire the asset and prepare it for use: Invoice price ($2,675) + Freight-in ($400) + Installation ($750) + Cost of trial runs ($150) = $3,975. The purchase discount lost is not capitalized.

The Roger's Company Incurred the Following Costs in the Acquisition \quad

The Roger's Company Incurred the Following Costs in the Acquisition $\quad$