1) Rocky Mountain Water Corporation paid $270,000 to purchase equipment for use in its manufacturing operations. In addition, Rocky Mountain Water Corporation incurred the following expenditures relating to the equipment: $1,500 freight to have the equipment shipped to its manufacturing facility · $750 insurance while the equipment was in transit · $3,200 for special steel and concrete reinforcements used to house the equipment in the factory · $1,200 for a one-year insurance policy on the equipment after it has been installed • $300 to test the equipment before it is placed in service · $400 for maintenance costs during the first year of service Calculate the cost of the equipment.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1) Rocky Mountain Water Corporation paid $270,000 to purchase equipment for use in its manufacturing
operations. In addition, Rocky Mountain Water Corporation incurred the following expenditures relating to the
equipment:
· $1,500 freight to have the equipment shipped to its manufacturing facility
· $750 insurance while the equipment was in transit
· $3,200 for special steel and concrete reinforcements used to house the equipment in the factory
· $1,200 for a one-year insurance policy on the equipment after it has been installed
· $300 to test the equipment before it is placed in service
· $400 for maintenance costs during the first year of
service
Calculate the cost of the equipment.
Transcribed Image Text:1) Rocky Mountain Water Corporation paid $270,000 to purchase equipment for use in its manufacturing operations. In addition, Rocky Mountain Water Corporation incurred the following expenditures relating to the equipment: · $1,500 freight to have the equipment shipped to its manufacturing facility · $750 insurance while the equipment was in transit · $3,200 for special steel and concrete reinforcements used to house the equipment in the factory · $1,200 for a one-year insurance policy on the equipment after it has been installed · $300 to test the equipment before it is placed in service · $400 for maintenance costs during the first year of service Calculate the cost of the equipment.
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