Acquisition Cost On January 1, 2017, Ruby Company purchased a piece of equipment with a list price of $60,000. The following amounts were related to the equipment purchase Terms of the purchase were 2/10, net 30. Ruby paid for the purchase on January 8 Freight costs of $1,000 were incurred A state agency required that a pollution control device be installed on the equipment at a cost of $2,500. During installation, the equipment was damaged and repair costs of $4,000 were incurred. Architect's fees of $6,000 were paid to redesign the work space to accommodate the new equipment. Ruby purchased liability insurance to cover possible damage to the asset. The three-year policy cost $8,000. Ruby financed the purchase with a bank loan. Interest of $3,000 was paid on the loan during 2016. Required: Determine the acquisition cost of the equipment.

Acquisition Cost On January 1, 2017, Ruby Company purchased a piece of equipment with a list price of $60,000. The following amounts were related to the equipment purchase Terms of the purchase were 2/10, net 30. Ruby paid for the purchase on January 8 Freight costs of $1,000 were incurred A state agency required that a pollution control device be installed on the equipment at a cost of $2,500. During installation, the equipment was damaged and repair costs of $4,000 were incurred. Architect's fees of $6,000 were paid to redesign the work space to accommodate the new equipment. Ruby purchased liability insurance to cover possible damage to the asset. The three-year policy cost $8,000. Ruby financed the purchase with a bank loan. Interest of $3,000 was paid on the loan during 2016. Required: Determine the acquisition cost of the equipment.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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