A company purchased a used machine for $80,000. The machine required installation costs of $8,000 and insurance while in transit of $500. At which of the following amounts would the equipment be recorded?

Question

Quizplus · Accepted Answer

The equipment would be recorded at $88,500, which includes the purchase price of $80,000, installation costs of $8,000, and insurance while in transit of $500. These are all considered capital expenditures necessary to bring the asset to its intended use.

A Company Purchased a Used Machine for $80,000