Wiley Company purchased new equipment for $60,000.Wiley paid cash for the equipment.Other costs associated with the equipment were: transportation costs,$1,000; sales tax paid $3,000; and installation cost,$2,500.The cost recorded for the equipment was:

Question

Quizplus · Accepted Answer

The cost recorded for the equipment should include all costs necessary to get the equipment ready for its intended use. Therefore, the cost recorded for the equipment would be the sum of the purchase price ($60,000), transportation costs ($1,000), sales tax paid ($3,000), and installation cost ($2,500), which would be a total of $66,500. Therefore, the correct option is D.

Wiley Company Purchased New Equipment for $60,000