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arsen [322]
3 years ago
10

Pharoah Company purchased machinery on January 1 at a list price of $270000, with credit terms 2/10, n/30. Payment was made with

in the discount period. Pharoah paid $79750 sales tax on the machinery and paid installation charges of $4800. Prior to installation, Pharoah paid $10900 to pour a concrete slab on which to place the machinery. What is the total cost of the new machinery
Business
1 answer:
Lina20 [59]3 years ago
5 0

Answer: $360,050

Explanation:

The total cost of a fixed asset refers to all the cash that was paid to acquire the asset, transport it and then install it.

Cost of the new machinery is therefore = Discounted cost price + Sales tax + Installation charges + Concrete slab

= (270,000 * (1 - 2%)) + 79,750 + 4,800 + 10,900

= 264,600 + 79,750 + 4,800 + 10,900

= $360,050

<em>Cost price was discounted by 2% as per the credit terms of 2/10 which means that there is a discount of 2% if the asset is paid for in 10 days. </em>

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"Clauss Company transfers out 14,000 units and has 2,000 units of ending work in process that are 25% complete. Materials are en
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