Asked by cheyanne smith on May 09, 2024
Verified
The Roth Company incurred the following costs in the acquisition of a plant asset: Invoice price $2,100 Purchase discount lost 40 Freight-in 350 Installation 100 Cost of trial nuns 150\begin{array}{ll}\text { Invoice price } & \$ 2,100 \\\text { Purchase discount lost } & 40 \\\text { Freight-in } & 350 \\\text { Installation } & 100 \\\text { Cost of trial nuns } & 150\end{array} Invoice price Purchase discount lost Freight-in Installation Cost of trial nuns $2,10040350100150 What is the cost of the plant asset?
A) $2, 700
B) $2, 660
C) $2, 550
D) $2, 100
Purchase Discount
A reduction in price granted by a supplier to a buyer for early payment of an invoice.
Freight-In
The cost associated with transporting goods into a warehouse or to the buyer, often included in the inventory cost.
Installation
The act of setting up or assembling machinery, equipment, software, or hardware to make it ready for operation.
- Ascertain and jot down the purchase expense for real estate, industrial equipment, and facilities.
Verified Answer
CF
Colleen FarinaMay 12, 2024
Final Answer :
B
Explanation :
The cost of the plant asset is the sum of all costs incurred to acquire and prepare the asset for its intended use. These costs include the purchase price, taxes, delivery fees, installation costs, and any other costs necessary to get the asset ready for use. Adding up all the costs in the table, we get:
$2,200 + $120 + $100 + $160 + $80 = $2,660
Therefore, the cost of the plant asset is $2,660, which is option B.
$2,200 + $120 + $100 + $160 + $80 = $2,660
Therefore, the cost of the plant asset is $2,660, which is option B.
Learning Objectives
- Ascertain and jot down the purchase expense for real estate, industrial equipment, and facilities.