Marlin Bowling installs automatic scorekeeping equipment with an invoice cost of

Question

Marlin Bowling installs automatic scorekeeping equipment with an invoice cost of $350,000. The electrical work required for the installation costs $10,000. Additional costs are $4,000 for delivery and $21,000 for sales tax. During the installation, a component of the equipment is carelessly left on a lane and hit by the automatic lane-cleaning machine. The cost of repairing the component is $4,200. What is the total record cost of the automatic scorekeeping equiment?


*Please explain how you get your answer and make sure that it is 100% correct.


Thank you

Explanation / Answer

ALL costs incurred related to the purchasing, transportation, and installation of the asset are included with the cost of equipment. Since the cost of repairing the component occurred while the asset was being installed, it also is included with the final cost of the asset. 350,000 + 10,000 + 4,000 + 21,000 + 4,200 = $389,200 Total Recorded Cost = $389,200 --> ans

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