Question

Bramble Corp. purchased equipment for $48800. Sales tax on the purchase was $2928. Other costs incurred were freight charges of $732, repairs of $427 for damage during installation, and installation costs of $813. What is the cost of the equipment

Answer 1

Cost of equipment = $52,887

Step-by-step explanation:

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

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

Here in this question the installation cost, sales taxes and repairs slab all fall within the definition of IAS 16

Hence cost of the equipment

48,800 + 2,928 + 732 + 427 = $52,887

Cost of equipment = $52,887