Question

On August 1, Daisy’s Groomers purchased new grooming equipment for $48,000 plus 8% sales tax. The...

On August 1, Daisy’s Groomers purchased new grooming equipment for $48,000 plus 8% sales tax. The equipment was advertised for $52,000. Other costs associated with the grooming equipment were: training for use of new equipment, $800; delivery cost of $225; installation cost, $1,100; and hiring of a new groomer, $1,000/month. At what amount will the grooming equipment be recorded on a balance sheet?

A. $ 53,965

B. $ 53,165

C. $ 54,085

D. $ 55,085

Business   Accounting   
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Answer #1

Option A) is correct. i.e $53,965

cost of Equipment
Amount($)
Cost of Equipment               48,000
(+)Sales tax @8%                 3,840
(+ training cost                    800
(+) Delivery cost                    225
(+) Installation cost                 1,100
Cost of Equipment to be recorded               53,965
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