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6 January, 18:35

Worthington Chandler Company purchased equipment for $12,000. Sales tax on the purchase was $800. Other costs incurred were freight charges of $200, repairs of $350 for damage during installation, and installation costs of $225.

What is the cost of the equipment?

a. $12,000b. $12,800c. $13,225d. $13,575

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  1. 6 January, 19:19
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    d. $13,575

    Explanation:

    The cost of the equipment includes all the cost incurred to bring the equipment to a state where it becomes available for use.

    These costs are the cost of the equipment, sales tax, freight, repairs during installation and installation cost.

    Therefore,

    Cost of the equipment = $12,000 + $800 + $200 + $350 + $225

    = $13,575

    The right option is d. $13,575.
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