Question

In: Accounting

3. A clothing designer purchased a piece of assembly equipment costing $32,000, and they paid in...

3. A clothing designer purchased a piece of assembly equipment costing $32,000, and they paid in cash. It also cost $2,200 to transport the equipment, $3,000 in taxes for the equipment, and $4,400 for workers to install the equipment in the factory. What amount should the clothing designer record the equipment at on the balance sheet? Please show all account names and steps.

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Expert Solution

answer: $41600

the value of equipment shown in the balance sheet is the book value of the equipment and the book value is equalt to the acquisition cost.according to acquisition cost purchase price,tax,transportation fee and installation fee is capitalized

acquisition cost=$32000+$2200+$3000+$4400=$41600

by using journal entry of the purchase of equipment

debit equipment $41600

credit cash $41600

ekkarill92 answered 2 years ago
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