Taylor Company Buys a Delivery Van with a List Price

question 107

Multiple Choice

Taylor Company buys a delivery van with a list price of $30,000.The dealer grants a 15% reduction in list price and an additional 2% cash discount on the net price if payment is made in 30 days.Sales taxes amount to $400 and the company paid an extra $300 to have a special horn installed.What should be the recorded cost of the van?

• A)$24,990.
• B)$25,645.
• C)$25,690.
• D)$25,390.

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Definitions:

Creditors

Individuals or entities to whom money is owed by another individual or entity.

Chapter 7

A bankruptcy process providing for the liquidation of a debtor's non-exempt assets to pay off creditors.

Automatic Stay

A legal provision that halts lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.

Repossess

The act of a lender taking back property from the borrower, typically due to failure to meet the terms of the loan agreement, such as defaulting on payments.