Enmerick Corporation purchases a new delivery truck for $45,000. The company logo is painted on the side of the truck for $1,500. The motor vehicle licence is $175. Annual insurance is $1,500. At what amount does Enmerick record the cost of the new truck?

Question

Quizplus · Accepted Answer

The cost of the truck includes the purchase price and any costs necessary to prepare it for use, such as the logo painting. Therefore, the cost is $45,000 + $1,500 = $46,500. The motor vehicle license and insurance are not included in the capitalized cost.

Enmerick Corporation Purchases a New Delivery Truck for $45,000