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The amount recorded as the cost of this equipment purchased by Harvard company is $12,546.
When it comes to recording equipment, once you begin using the asset, loop the income statement in. Until the asset has completely depreciated, note the asset's annual depreciation on your business income statement.
The cost of furniture, autos and other items is comprised of the purchase price, sales taxes, shipping costs, insurance for the item's protection during shipping, assembly, installation, and any other expenses necessary to prepare the item for usage.
Price of an Asset:
The invoice price is merely one component of an asset's cost. The incidental costs related to putting the item into use are also included. costs involved in putting the item into use, including sales tax, cash discounts, installation, freight, testing, and other expenses.
The amount has to be paid within the discount period, hence a 2% discount is applicable to it.
The amount of equipment = $11,500 × (100% -2%)
= $11,270
cost of this equipment = amount of equipment + delivery charges + installation charges + sales tax
=11,270 + 160 + 185 + 931
The cost of equipment will come to be $12,546
Therefore the amount recorded as the cost of this equipment is $12,546
To know more about the amount of depreciation expense: https://brainly.com/question/25806993
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The correct question is:
Harvard Company purchased equipment having an invoice price of $11,500. The terms of sales were 2/10, n/30, and Harvard paid within the discount period. In addition, Harvard paid a $160 delivery charge, $185 installation charge, and $931 sales tax.
The amount recorded as the cost of this equipment is: _____
