Final answer:
The total cost of the truck is calculated by adding the cash price, sales taxes, motor vehicle license, and painting and lettering expenses, but not the accident insurance cost. The total comes to $26,610.
Step-by-step explanation:
The cost of the truck is determined by summing the cash price and all additional expenditures that are necessary to make the truck ready for its intended use. These can include the sales taxes, the cost of painting and lettering, and, in some cases, motor vehicle license fees. However, the cost of accident insurance during the use of the truck is not included, as it is considered an operational expense rather than a capital expenditure.
Thus, the total cost of the truck would be:
- Cash price: $22,280
- Sales taxes: $1,730
- Motor vehicle license: $250
- Painting and lettering: $2,350
After summing these amounts, we find:
Total cost = $22,280 + $1,730 + $250 + $2,350 = $26,610
The accident insurance cost is not a capitalizable cost and therefore is not included in the price of the truck.