A company purchased equipment invoiced at $45,000. Sales tax on the purchase was $2,500. Other costs incurred were freight charges of $1,400, repairs of $2,700 for damage during installation, and installation costs of $2,450. Assume that all purchases/acquisitions transactions were on credit. Recognize these transactions in T-accounts. Solution Equipment A/c Freight A/c Repairs A/c To Accounts To Accounts 1400 By Equipment A/c 1400 To Accounts 2700 By Equipment A/c 2700 Payable A/c 45000 Payable A/c Payable A/c To Sales Tax A/c 2500 To Freight A/c 1400 Installation Costs A/c To Repairs A/c 2700 To Installation 2450 To Accounts 2450 By Equipment A/c 2450 Costs A/c Payable A/c Sales Tax A/c To Accounts 2500 By Equipment A/c 2500 Payable A/c.

1. A company purchased equipment invoiced at $45,000. Sales tax on the purchase was $2,500.
Other costs incurred were freight charges of $1,400, repairs of $2,700 for damage during
installation, and installation costs of $2,450. Assume that all purchases/acquisitions transactions
were on credit.
Recognize these transactions in T-accounts.
Solution
Equipment A/c Freight A/c Repairs A/c To Accounts To Accounts 1400 By
Equipment A/c 1400 To Accounts 2700 By Equipment A/c 2700 Payable A/c 45000 Payable
A/c Payable A/c To Sales Tax A/c 2500 To Freight A/c 1400 Installation Costs A/c
To Repairs A/c 2700 To Installation 2450 To Accounts 2450 By Equipment A/c 2450
Costs A/c Payable A/c Sales Tax A/c To Accounts 2500 By
Equipment A/c 2500 Payable A/c