Question

Norman Geological Surveys located in Baltimore, Maryland purchased surveying equipment from a manufacturer in Raleigh, North Carolina for $26,100. Norman incurred the following additional charges in relation to the equipment: Total Freight from Raleigh to Baltimore 52240. Norman and the seller divided these charges amongst themselves in the following ratio: Norman 43%; Manufacturer 57%. Insurance premium on equipment while in transit $400 Insurance premium on equipment for first year $300 Installation of Equipment: $700 Testing of Equipment to make sure it was installed properly: 5225 Sales Taxes 51827 Calculate the cost of the equipment on Norman's books? Round your calculations to the nearest dollar

Answer 1

We have to capitalize which will increase the asset and benefits from Also, the expenditure the asset put to use. the expenditures, life of the the asset. we incurred till cost of purchase $ 26160 Freight choges - (aquo x 43-4. ost a 963.2 Insurance premium on equipment at while in transit uoo Installation charges 700 Testing of equipment 925 Sales tan 1827 Cost of Equipment 30215.2 Rounded off to nearest dollar the cost of equipment is 130215