Question

ZETO Company acquired a new construction crane. The crane cost $1,000,000. In addition, Zeto paid delivery cost of $50,000, setup and installation of $75,000, and truck repairs of $5,000 (it seems that during setup, a large beam was accidentally dropped on the hood of one of Zeto's trucks).

ZETO should record the crane in its accounting records at:
a. $1,000,000
b. $1,050,000
c. $1,075,000
d. $1,125,000

Answer 1

Total cost= $1,125,000

Step-by-step explanation:

Giving the following information:

The crane cost $1,000,000. Also, Zeto paid delivery cost of $50,000, setup and installation of $75,000, and truck repairs of $5,000.

Total cost= purchase price + freight + set up and installation

Total cost= 1,000,000 + 50,000 + 75,000= 1,125,000