amount paid as transportation and insurance cost

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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The company paid 1.180 TL, including 18% VAT, for the transportation and insurance cost of the photocopier it had purchased for 8.000 TL excluding 18% VAT. The amount paid as transportation and insurance cost is recorded in which of the following accounts?
 
 a)

253 Plant Machinery and Equipment Hs.

 B)

760 Marketing Sales and Distribution Expenses Hs.

 NS)

255 Fixtures Hs.

 D)

770 General Administrative Expenses Hs.

 TO)

251 Current Investments Hs.

Expert Solution
The cost of a fixed asset

The cost of a fixed asset include its purchase price and all other costs incurred to bring it into the present location and condition.

The amount paid as transportation and insurance cost is a part of the cost of fixed asset 'photocopier' because it has been incurred to bring that fixed asset into present location and condition.

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