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Accounting

Abco Company purchased on account farm equipment from Norway Corp. with an invoice price of $96,000. Other costs incurred were freight costs, $1,320; installation wiring and foundation, $2,640; material and labor costs in testing equipment, $8400; oil lubricants and supplies to be used with equipment, $600; fire insurance policy covering equipment, $1,680. The equipment is estimated to have a $6,000 salvage value at the end of its 8 year useful service life.

Instruction:

Compute the acquisition cost of the equipment and prepare the journal entry to record the purchase.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M973997

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