Question

Kegler Bowling installs automatic scorekeeping equipment with an invoice cost of $190,000. The electrical work required for the installation costs $20,000. Additional costs are $4,000 for delivery and $13,700 for sales tax. During the installation, a component of the equipment is carelessly left on a lane and hit by the automatic lane-cleaning machine. The cost of repairing the component is $1,850. What is the total recorded cost of the automatic scorekeeping equipment?

Answer 1

Recorded cost = $229,550.00

Step-by-step explanation:

According to International Accounting Standards (IAS) 16, property plants and equipment, the cost of an equipment includes all of the cost necessary to bring and make it ready for the intended use.

These costs include purchase cost, installation cost, delivery fees and commission associated with the purchase transaction.

Applying this principles, the recorded cost of the scorekeeping machine would be

=$190,000 + $20,000 + 4,000 + 13,700 + $1,850.

= $229,550.