Author Question: A city recently ordered a new fire truck. The base cost of the truck is 250,000 . In addition, ... (Read 78 times)

krzymel · **on:** Jul 5, 2018

A city recently ordered a new fire truck. The base cost of the truck is 250,000 .

In addition, the city will be paying 1,000 in delivery charges and 5,000 for necessary calibrations once it is delivered; and the city will also have the necessary logos added at a cost 2,500 . The capitalizable cost of the fire truck in the General Fund will be
A. 0.
B. 251,000.
C. 256,000.
D. 258,500.

Question 2

Gomez Service Company paid its first installment on a note payable in the amount of 2,000 . How will thistransaction affect the accounting equation?
a. Increase Liabilities (Notes Payable) and decrease Assets (Cash)
b. Decrease Assets (Cash) and decrease Owner's Equity (Note Payable Expense)
c. Decrease Assets (Cash) and decrease Assets (Notes Receivable)
d. Decrease Assets (Cash) and decrease Liabilities (Notes Payable)