Question

Crane Company incurs these expenditures in purchasing a truck: cash price $23,030, accident insurance (during use) $1,690, sales taxes $1,380, motor vehicle license $670, and painting and lettering $2,140.What is the cost of the truck?

Answer 1

Answer:

Cost of truck = 27,220

Explanation:

The Cost of the Truck is Calculated as Follows

                                                                     $

Cost Price                                                23,030

Accident Insurance(

its a revenue expenditure

as it will reoccur after 1 year)                   -

Sales Tax

( One time Cost Capital expenditure)       1,380

Motor Vehicle License

( One time Cost Capital Expenditure)         670

Painting and Lettering

( Capital Expenditure )                                2,140

Cost of truck                                              27,220