On December 31, DCH purchased new equipment for $365,000. Other costs connected
ID: 2580839 • Letter: O
Question
On December 31, DCH purchased new equipment for $365,000. Other costs connected with the purchase were as follows
State sales tax
29,200
Freight costs
5,600
Insurance while in transit
800
Employee training
1,200
Installation costs
2,000
Insurance for the first year of operations
2,400
Testing
700
Determine the amount that the equipment should be recorded for and prepare the journal entry to record all amounts noted above
State sales tax
29,200
Freight costs
5,600
Insurance while in transit
800
Employee training
1,200
Installation costs
2,000
Insurance for the first year of operations
2,400
Testing
700
Explanation / Answer
Purchase price 365000 State sales tax 29200 Freight costs 5600 Insurance while in transit 800 Installation costs 2000 Testing 700 Cost of Equipment 403300 Equipment 403300 Training expenses 1200 Insurance expense/Prepaid insurance 2400 Cash 406900
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