Harbour Company Purchased a New Piece of Equipment with a List

question 78

Essay

Harbour Company purchased a new piece of equipment with a list price of $200,000 and subject to a 6 percent discount if paid within 45 days.Harbour paid within the discount period.The company also paid $1,650 to obtain title to the equipment and $650 as the license fee for the first year of operation.It paid $2,475 to level the area in which the equipment would be located and $11,750 to relocate other equipment that would have interfered with the proper operation of the new equipment.Harbour paid $500 for property and liability insurance for the first year of operation.What is the acquisition cost of this equipment that Harbour should record in its accounting records? Indicate the treatment of any amount not included in acquisition cost.

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Definitions:

Reliance

The act of depending on or trusting in something or someone, often in the context of reasoning or making decisions.

Municipal Bylaw

Local government rules or regulations enacted by municipal authorities to govern matters within their jurisdiction, such as zoning, noise, and public behavior.

Permit Approval

The process of obtaining formal authorization from authorities to engage in certain activities or operations.

Excess Fees

Charges that exceed what is deemed reasonable or customary for services or transactions, often subject to scrutiny in financial and legal contexts.