Saturday, October 10, 2020

A company purchased a piece of equipment by paying $5,000 cash. Shipping cost of $400 to get the equipment to its factory was also incurred. The fair value of this equipment is $7,000. For what amount should the company record the equipment?

A company purchased a piece of equipment by paying $5,000 cash. Shipping cost of $400 to get the equipment to its factory was also incurred. The fair value of this equipment is $7,000. For what amount should the company record the equipment?



A) $5,000.

B) $5,400.

C) $7,000.

D) $7,400.


Answer: B

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