Schrock Company purchases a new delivery van for $60,000. The sales taxes are $4,500. The logo of the company is painted on the side of the van for $1,200. The van's annual license is $120. The van undergoes safety testing for $220. What does Schrock record as the cost of the new van?

Question

Quizplus · Accepted Answer

The cost of the van includes the purchase price, sales taxes, and the cost of painting the logo. Therefore, $60,000 + $4,500 + $1,200 = $65,700. The license and safety testing are not included in the capitalized cost.

Schrock Company Purchases a New Delivery Van for $60,000