Question

Cullumber Company incurs these expenditures in purchasing a truck: cash price $22,970, accident insurance (during use) $1,640, sales taxes $1,720, motor vehicle license $340, and painting and lettering $2,620. What is the cost of the truck? The cost of the truck $Enter a dollar amount

Answer 1

Answer:answer is $27,310

Step-by-step explanation:

Cost attributable to the truck at the point of purchase will be

Cash price + Sales tax + Cost of painting and lettering

22,970, + 1,720 + 2,620

= $27,310

However, The cost of accident insurance and motor vehicle license are the expenditure incurred on the truck after the truck had been purchased, it will not form part of the cost of purchasing the truck.

Answer 2

$27,310

Step-by-step explanation:

The computation of the cost of the truck is shown below:

= Purchase value of the truck + sales taxes + painting and lettering costs

= $22,970 + $1,720 + $2,620

= $27,310

The accident insurance and the motor vehicle license are not included in the cost of the truck computation because these are the yearly costs that are not considered for the computation part. Hence, it would be ignored