Question

Granite Company purchased a machine costing $128,000, terms 3/10, n/30. The machine was shipped FOB shipping point and freight charges were $2,800. The machine requires special mounting and wiring connections costing $10,800. When installing the machine, $2,300 in damages occurred. Compute the cost recorded for this machine assuming Granite paid within the discount period.

Answer 1

Answer:

machine enter the accounting at 138,210 dollars

Explanation:

cost: 128,000 x ( 1 - 3%) = 124,610

shipping cost:                      2,800

installation cost:                 10,800  

total incurred cost

to leave the machine

ready for use:                138,210

The damge are expenses for the period as they arent a necessary cost to utilize the machine.

The company used the discount price over the list price as this is the atual cost incurred