A machine was built for $125,500 during July, the cost included $750 in interest expense.The company had to pay $4,000 for shipping and another $2,000 for insuring the parts.The capitalized cost of the equipment was:
A)$124,750
B)$125,500
C)$131,500
D)$132,250

Question

Quizplus · Accepted Answer

The capitalized cost of the equipment includes the purchase price, shipping, and insurance, but not the interest expense. Therefore, the total capitalized cost is $125,500 (purchase price) + $4,000 (shipping) + $2,000 (insurance) = $131,500.

A Machine Was Built for $125,500 During July, the Cost