On January 1, 2014, Humansville Company purchased a piece of equipment with a list price of $80,000. The following amounts were related to the equipment purchase:
• Terms of the purchase were 2/10, net 30. Humansville paid for the purchase on January 8.
• Freight costs of $1,250 were incurred.
• A state agency required that a pollution control device be installed on the equipment at a cost of $3,300.
• During installation, the equipment was damaged and repair costs of $4,200 were incurred.
• Architect's fees of $6,100 were paid to redesign the work space to accommodate the new equipment.
• Humansville purchased liability insurance to cover possible damage to the asset. The threeyear policy cost
$8,700.
• Humansville financed the purchase with a bank loan. Interest of $4,600 was paid on the loan during 2014.
REQUIRED:
Determine the acquisition cost of the equipment.

Question

On January 1, 2014, Humansville Company purchased a piece of equipment with a list price of $80,000. The following amounts were related to the equipment purchase:
  • Terms of the purchase were 2/10, net 30. Humansville paid for the purchase on January 8.
• Freight costs of $1,250 were incurred.
• A state agency required that a pollution control device be installed on the equipment at a cost of $3,300.
• During installation, the equipment was damaged and repair costs of $4,200 were incurred.
• Architect's fees of $6,100 were paid to redesign the work space to accommodate the new equipment.
• Humansville purchased liability insurance to cover possible damage to the asset. The three­year policy cost
$8,700.
• Humansville financed the purchase with a bank loan. Interest of $4,600 was paid on the loan during 2014.
REQUIRED:
Determine the acquisition cost of the equipment.

Quizplus · Accepted Answer

The Answer of On January 1, 2014, Humansville Company purchased a piece of equipment with a list price of $80,000. The following amounts were related to the equipment purchase:
  • Terms of the purchase were 2/10, net 30. Humansville paid for the purchase on January 8.
• Freight costs of $1,250 were incurred.
• A state agency required that a pollution control device be installed on the equipment at a cost of $3,300.
• During installation, the equipment was damaged and repair costs of $4,200 were incurred.
• Architect's fees of $6,100 were paid to redesign the work space to accommodate the new equipment.
• Humansville purchased liability insurance to cover possible damage to the asset. The three­year policy cost
$8,700.
• Humansville financed the purchase with a bank loan. Interest of $4,600 was paid on the loan during 2014.
REQUIRED:
Determine the acquisition cost of the equipment.

On January 1, 2014, Humansville Company Purchased a Piece of Equipment