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13 November, 00:34

Schrock Company purchases a new delivery van for $60,000. The sales taxes are $4,500. The logo of the company is painted on the side of the van for $1,200. The van's annual license is $120. The van undergoes safety testing for $220. What does Schrock record as the cost of the new van?

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  1. 13 November, 00:56
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    Schrock record the $65,920 as the cost of the new van

    Explanation:

    The computation of cost of the new van is computed below:

    = Purchase cost + sales tax + logo cost + safety testing cost

    = $60,000 + $4,500 + $1,200 + $220

    = $65,920

    where,

    Purchase cost is $60,000

    Sales tax is $4,500

    Logo cost is $1,200

    Safety testing cost is $220

    The van annual license is not included in the cost of new wan. Thus, it is not consider in the computation part.

    Hence, Schrock record the $65,920 as the cost of the new van
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