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27 March, 02:37

Novak Corp. purchased a delivery van with a $67000 list price. The company was given a $5600 cash discount by the dealer, and paid $2900 sales tax. Annual insurance on the van is $1500. As a result of the purchase, by how much will Novak Corp. increase its van account?

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  1. 27 March, 02:50
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    Novak Corp. increase its van account = $58500

    Explanation:

    given data

    purchased van List price = $67000

    cash discount = $5600

    sales tax = $2900

    Annual insurance = $1500

    to find out

    how much increase its van account

    solution

    Novak Corp. increase its van account is express as

    Novak Corp. increase its van account = List price - cash discount + sales tax ... 1

    put here value

    Novak Corp. increase its van account = $67000 - ($5600 + $2900)

    Novak Corp. increase its van account = $67000 - ($8500)

    Novak Corp. increase its van account = $58500

    and we know that expenses that incurred till the date of installation has to be charged to fixed asset and annual insurance and it is taken after installation

    so Annual Insurance charges is not include
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