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Question 1 x Your answer is incorrect. Try again. Pharoah Ltd. incurs these expenditures in purchasing a truck: invoice price
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Answer #1

Ans:

Cost Of Truck $ 47,730

Explanation:

1)

Invoice Price $ 46,090
Installation of trailer hitch $940
Painting and Lettering $700
Total cost of truck $ 47,730

2) The expenditures for insurance and motor vehicle licence are not included as they do not benefit future periods.

3) As they do not add value for future, they are not included in the cost of truck.

4) These are annual cost and hence it should be expensed in the particular year.

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