20. Rains Company purchased equipment on January 1 at a list price of $125,000,
ID: 2549433 • Letter: 2
Question
20. Rains Company purchased equipment on January 1 at a list price of $125,000, with a 2% discount if payment is made within a 10-day discount period. Payment was made within the discount period. Rains paid $6,250 sales tax on the equipment, and paid installation charges of $2,200. Prior to installation, Rains paid $5,000 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment? A) $131,250. B) $135,950. C) $138,450. D) $126,250. 21. Intangible assets A) B) C) D) should be reported under the heading Property, Plant, and Equipment. are not reported on the balance sheet because they lack physical substance. should be reported as Current Assets on the balance sheet. should be reported as a separate classification on the balance sheet.Explanation / Answer
20.
Answer is: B) $135,950
21. Intangible assets should be reported as a seperate classification on the balance sheet. it will show cost of the assets after deducitng amortization. ie. book value
Purchase price of equipment $ 125,000 Less: Discount @ 2% $ (2,500) Sales tax $ 6,250 Installation charge $ 2,200 Expense for base $ 5,000 Total cost of the new equipment $ 135,950Related Questions
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