Vincent pays $20,000 for equipment to use in his trade or bu
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1) Vincent pays $20,000 for equipment to use n his trade or business. He pays sales tax of $800 as a result of the purchase. Must the $800 tax be capitalized as part of the purchase price?
2) Your friends tells you that the capital gains tax is discriminatory in that it is imposed upon individuals who can afford to buy capital assets. Do you agree or disagree? Be sure to include the definition of capital asset and capital gain in your response.
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Solution Summary
Your response is 267 words, explaining capitalized costs, capital goods and capital gains and how they differ.
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Your response is 267 words.
Yes, all costs of getting the item "ready for use" are capitalized as part of the purchase price. This includes, for instance, sales tax, in bound shipping, insurance during delivery, initial testing and set up.
In financial accounting, capital assets are those that last for multiple periods. While they are naturally more expensive than disposal or one-use items, ...
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