Question

Pioneer Trucking Company, which leases trucks to oilfield workers to move their equipment, recently purchased a truck. The sticker price of the truck was $52,000 and the company paid $47,500. Pioneer also paid sales tax of $3,500 on the purchase, shipping and preparation costs of $4,500, and insurance for the first year of operation of $5,500. At what amount should Pioneer debit to the truck account in their general journal?

Multiple Choice

• $52,000.

• $47,500.

• $52,000.

• $55,500.

Answer 1

$55,500
Price of the truck	$47,500
Sales Tax	$3,500
Shipping and Preparation costs	$4,500
	$55,500
Note:
Insurance $5,500 will not be added into truck account, as the
insurance cost for the operation will not be capitalized.