Question

Hyde Boats purchased machinery on January 1 at a list price of $295,000, with credit terms 3/10, n/30. Payment was made within the discount period. Hyde Boats paid $17,700 sales tax on the machinery, and paid installation charges of $3,900. Hyde Boats also paid $15,900 to pour a concrete base that was necessary to place the machinery in service.
What is the total cost of the new machinery?
A. $332.500
B. $323.650
C. $307.750
D. $319.750

Answer 1

Answer:

Total purchase price= $323,650

Explanation:

Giving the following information:

Purchase price= $295,000

Installation= $3,900

Concrete for installation= $15,900

The total cost of the machine includes the purchase price and all costs required to put it into operation. Taxes are part of the purchase cost.

First, we need to calculate the net cash discount:

Net discount= 295,000 * 0.03= $8,850

Now, the total purchase price:

Total purchase price= (295,000 - 8,850) + 17,700 + 3,900 + 15,900

Total purchase price= $323,650