On January 1, 2017, Ruby Company purchased a piece of equipment with a list price of $60,000. The…
On January 1, 2017, Ruby Company purchased a piece of equipment with a list price of $60,000. The following amounts were related to the equipment purchase: • Terms of the purchase were 2/10, net 30. Ruby paid for the purchase on January 8. • Freight costs of $1,000 were incurred. • A state agency required that a pollution control device be installed on the equipment at a cost of $2,500. • During installation, the equipment was damaged and repair costs of $4,000 were incurred. • Architect’s fees of $6,000 were paid to redesign the work space to accommodate the new equipment. • Ruby purchased liability insurance to cover possible damage to the asset. The three-year policy cost $8,000. • Ruby financed the purchase with a bank loan. Interest of $3,000 was paid on the loan during 2016.
