Which items are included in the purchase price of equipment?

• A. Delivery and attachments
• B. Taxes and insurance
• C. Training costs
• D. Warranty extension

Answer: (A)

When determining the purchase price of equipment, the amount capitalized includes all costs needed to bring the asset to a usable condition. Delivery charges and attachments fit this because they are essential to get the equipment to its location and ready to operate. Other items—taxes and insurance, training costs, and warranty extensions—are not part of the asset’s initial cost: taxes and insurance are typically treated as ongoing or separate costs, training relates to user capability rather than the asset itself, and a warranty extension is a post-purchase service contract. So the cost that belongs in the purchase price is delivery and attachments.