Question

Larkspur, Inc. purchased a delivery truck with a $44000 list price. The company was given a $4200 cash discount by the dealer and paid $2200 sales tax. Annual insurance on the truck is $1000. As a result of the purchase, by how much will Larkspur, Inc. increase its truck account

Answer 1

Larkspur Inc. will increase its truck account by: $43,000.

Step-by-step explanation:

Step I

To arrive at the above, we need to make the necessary additions and deductions:

Purchase Price = $44,000

Less cash discount of $4,200. Therefore, the final offer is

$44,000-$4,200 = $39,800.

Step II - Calculate the final value truck by applying Sales Tax

Final sales value amount plus sales tax

$39,800 + $2,200 = $ 42 000

Step III - Calculate Total cost to company by adding cost of insurance of the vehicle.

$ 42 000 + $1,000 = $ 43,000

Therefore the total cost of the truck the company is $43,000.

Cheers!