Danube Corp. purchased a used machine for $21,000. The machine required installation costs of $6000 and insurance while in transit of $1800. At which of the following amounts would the machine be recorded?

Question

Quizplus · Accepted Answer

The machine would be recorded at $28,800, which is the sum of the purchase price ($21,000), installation costs ($6,000), and insurance while in transit ($1,800). These are all considered capital expenditures that are necessary to bring the asset to its intended use.