Question

Sheffield company purchased equipment and these costs were incurred: cash price $65100 sales taxes 3800 insurance during transit 620 installation and testing 810 total costs $70330 sheffield will record the acquisition cost of the equipment as select answer from the options below

-$68900.
-$70330.
-$69520.
-$65100.

Answer 1

The total acquisition cost Sheffield Company will record for the equipment is $70,330, which includes the cash price, sales taxes, insurance during transit, and installation and testing costs.

Step-by-step explanation:

The acquisition cost of an asset should include the purchase price, and any additional costs necessary to get the asset ready for its intended use. In the case of the Sheffield Company, the following costs were incurred: cash price of the equipment ($65,100), sales taxes ($3,800), insurance during transit ($620), and installation and testing ($810). To calculate the total acquisition cost of the equipment, one must sum these costs.

The correct acquisition cost is: $65,100 + $3,800 + $620 + $810 = $70,330.

Therefore, Sheffield will record the acquisition cost of the equipment as $70,330.