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26 October, 23:40

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:

A. $60,000

B. $61,000

C. $64,000

D. $66,500

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  1. 27 October, 01:47
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    The cost recorded for the equipment=$66,500

    Explanation:

    When dealing with the total cost of an equipment we take the purchase cost and other additional associated costs that come with the equipment. This can be expressed as;

    T=P+A

    where;

    T=total cost

    P=purchase cost

    A=additional costs (transportation cost+sales tax+installation cost)

    In our case;

    T=unknown

    P=$60,000

    A = (1,000+3,000+2,500) = $6,500

    replacing;

    T=60,000+6,500=66,500

    The total cost=$66,500

    The cost recorded for the equipment=$66,500
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