Bahama Catering purchased a commercial dishwasher by paying cash of $5,000. The dishwasher's fair value on the date of the purchase was $5,600. The company incurred $400 in transportation costs, $300 installation fees, and paid a $200 fine for illegal parking while the dishwasher was being delivered. For what amount will Bahama record the dishwasher?

Question

Quizplus · Accepted Answer

$5,000 + $400 + $300 = $5,700. The parking ticket should be expensed as incurred since it is not a cost necessary to get the asset ready for use.

Bahama Catering Purchased a Commercial Dishwasher by Paying Cash of $5,000