QUESTION 16 On, Jan. 1, 2018, ABC purchases a van for making deliveries to customers. Cash payments on that date are: $22,800 to the seller of the van; $1,020 in sales taxes; $1,100 for insurance coverage through June 30; and $650 for license plates to operate the truck through December 31. On Jan. 2, ABC pays $2,600 to a body shop to paint lettering on the van and install custom warming ovens. ABC expects to use the van for 12 years, and estimates its salvage value at the time will be $1,850. What amount should be capitalized as the acquisition cost of the van? O a. $26,420 O b. $28,170 O c. $24,570 O d. $26,320

QUESTION 16 On, Jan. 1, 2018, ABC purchases a van for making deliveries to customers. Cash payments on that date are: $22,800 to the seller of the van; $1,020 in sales taxes; $1,100 for insurance coverage through June 30; and $650 for license plates to operate the truck through December 31. On Jan. 2, ABC pays $2,600 to a body shop to paint lettering on the van and install custom warming ovens. ABC expects to use the van for 12 years, and estimates its salvage value at the time will be $1,850. What amount should be capitalized as the acquisition cost of the van? O a. $26,420 O b. $28,170 O c. $24,570 O d. $26,320

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 54BE

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