Kegler Bowling installs automatic scorekeeping equipment with an invoice cost of $190,000. The...
Question:
Kegler Bowling installs automatic scorekeeping equipment with an invoice cost of $190,000. The electrical work required for the installation costs $20,000. Additional costs are $4,000 for delivery and $13,700 for sales tax. During the installation, a component of the equipment is carelessly left on a lane and hit by the automatic lane-cleaning machine. The cost of repairing the component is $1,850.
What is the total recorded cost of the automatic scorekeeping equipment?
Operating Expense:
All the expenses made by a company to maintain and support its process is known as operating expense. The cost of goods which is also known as the direct expenses is not included in the operating expense.
Answer and Explanation: 1
| Particulars | Total cost | Included/Excluded | Debit machinery | Debit expense |
|---|---|---|---|---|
| Invoice cost | 190,000 | Included | 190,000 | |
| Electrical work required for installation | 20,000 | Included | 20,000 | |
| Delivery costs | 4,000 | Included | 4,000 | |
| Sales tax | 13,700 | Included | 13,700 | |
| Repair costs | 1,850 | Excluded | 1,850 | |
| Total | 229,550 | 227,700 | 1,850 |
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