Question

Novak Corp. purchased a delivery van with a $67000 list price. The company was given a $5600 cash discount by the dealer, and paid $2900 sales tax. Annual insurance on the van is $1500. As a result of the purchase, by how much will Novak Corp. increase its van account?

Answer 1

Novak Corp. increase its van account = $58500

Step-by-step explanation:

given data

purchased van List price = $67000

cash discount = $5600

sales tax = $2900

Annual insurance = $1500

to find out

how much increase its van account

solution

Novak Corp. increase its van account is express as

Novak Corp. increase its van account = List price - cash discount + sales tax ....................1

put here value

Novak Corp. increase its van account = $67000 - ( $5600 + $2900 )

Novak Corp. increase its van account = $67000 - ( $8500 )

Novak Corp. increase its van account = $58500

and we know that expenses that incurred till the date of installation has to be charged to fixed asset and annual insurance and it is taken after installation

so Annual Insurance charges is not include