Question

Beaverton Lumber purchased milling equipment for $44,000. In addition to the purchase price, Beaverton made the following expenditures: freight, $2,400; installation, $3,900; testing, $2,900; personal property tax on the equipment for the first year, $950. What is the initial cost of the equipment

Answer 1

Answer:

$53,200

Explanation:

Given that

Purchase price = $44,000

Freight =$2,400

Installation = $3,900

Testing = $2,900

The computation of initial cost of the equipment is shown below:-

= Purchase price + Freight + Installation + Testing

= $44,000 + $2,400 + $3,900 + $2,900

= $53,200

Therefore, for computing the initial cost of the equipment we simply add purchase price, freight, installation and testing.