Tej's Garage, a local automobile repair shop, is purchasing new equipment. The electrical work required...
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Accounting
Tej's Garage, a local automobile repair shop, is purchasing new equipment. The electrical work required to prepare for the installation is $16,000. The invoice price of the equipment was $137,000 (there were no discounts). Additional costs were $4,100 for delivery and $500 for insurance during transportation.
During the installation, a component of the equipment was damaged due to carelessness on the part of Tej's crew. The cost of repairing the component was $1,835.
Required:
1. What is the total cost that should be reported on the balance sheet for the equipment?
2. What amount (if any) should be reported as a repair expense on the income statement?
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