Yale Company purchased equipment having an invoice price of $21,500.The terms of sale were 2/10,n/30,and Yale paid within the discount period.In addition,Yale paid a $320 delivery charge,$350 installation charge,and $1,183 sales tax.The amount recorded as the cost of this equipment is:
A)$21,070.
B)$21,500.
C)$21,740.
D)$22,923.

Question

Quizplus · Accepted Answer

The cost of the equipment includes the invoice price minus the discount, plus delivery, installation, and sales tax. The discount is 2% of $21,500, which is $430. So, the net invoice price is $21,070. Adding the delivery charge ($320), installation charge ($350), and sales tax ($1,183) gives a total cost of $22,923.

Yale Company Purchased Equipment Having an Invoice Price of $21,500