1. Anniston Company purchased equipment and incurred the following costs:
Purchase price ............................. $68,500
Cost of trial runs ................................ 400
Installation costs ............................... 325
Sales tax .......................................3,425
What is the cost of the equipment?
a. $68,500
b. $71,925
c. $72,250
d. $72,650
2. The cost principle requires that companies record fixed assets at:
a. Fair value.
b. Book value.
c. Historical cost.
d. Market value.
3. Refer to the information for Cox Inc. above. What would be the balance in the accumulated depreciation account at December 31, 2020, if the straight-line method were used?
a. $156,000
b. $160,000
c. $312,000
d. $328,000