# Steele Corp. purchases equipment for $25,000. Regarding the purchase, Steele recorded the following transactions: • Paid shipping of$1,000 • Paid installation fees of $2,000 • Pays annual maintenance cost of$200 • Received a 5% discount on $25,000 sales price Determine the acquisition cost of the equipment. FindFindarrow_forward ### Principles of Accounting Volume 1 19th Edition OpenStax Publisher: OpenStax College ISBN: 9781947172685 #### Solutions Chapter Section FindFindarrow_forward ### Principles of Accounting Volume 1 19th Edition OpenStax Publisher: OpenStax College ISBN: 9781947172685 Chapter 11, Problem 5EA Textbook Problem 1 views ## Steele Corp. purchases equipment for$25,000. Regarding the purchase, Steele recorded the following transactions:• Paid shipping of $1,000• Paid installation fees of$2,000• Pays annual maintenance cost of $200• Received a 5% discount on$25,000 sales priceDetermine the acquisition cost of the equipment.

To determine

Introduction:

Cost of acquisition refers to all the costs incurred to acquire an asset, and all the costs incurred to put that asset in operations. It may include taxes, shipping costs, installations costs, etc.

To calculate:

Acquisition cost of equipment.

### Explanation of Solution

Calculation of cost of equipment for Company S is given below:

 Particulars Amount ($) Purchase price 25,000 Add: Shipping cost 1,000 Installation fees 2,000 Annual maintenance costs 200 Less: Discount received ($25

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