Bahama Catering purchased a commercial dishwasher by paying cash of $4,600. The
ID: 2477731 • Letter: B
Question
Bahama Catering purchased a commercial dishwasher by paying cash of $4,600. The dishwasher's fair value on the date of the purchase was $4,960. The company incurred $380 in transportation costs, $390 installation fees, and paid a $300 fine for illegal parking while the dishwasher was being delivered. For what amount will Bahama record the dishwasher?
Bahama Catering purchased a commercial dishwasher by paying cash of $4,600. The dishwasher's fair value on the date of the purchase was $4,960. The company incurred $380 in transportation costs, $390 installation fees, and paid a $300 fine for illegal parking while the dishwasher was being delivered. For what amount will Bahama record the dishwasher?
Explanation / Answer
Dishwasher will be recorded at its purchase price + expense incurred on its transportation and installation fee
= 4600 + 380 + 390 , = 5570
Illigal parking fine and fair value has no relevance in recording cost of asset.
Illiegal parking fee will be expense to be treated seperately