Answered

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Rizio Co. purchases a machine for $12,500, terms 2/10, n/60, FOB shipping point. The seller prepaid the $360 freight charges, adding the amount to the invoice and bringing its total to $12,860. The machine requires special steel mounting and power connections costing $895. Another $475 is paid to assemble the machine and get it into operation. In moving the machine to its steel mounting, $180 in damages occurred. Also, $40 of materials is used in adjusting the machine to produce a satisfactory product. The adjustments are normal for this machine and are not the result of the damages.

Required:
Compute the cost recorded for this machine.

Sagot :

Answer:

$14,020

Explanation:

The amount included in the cost of equipment:

The Invoice price of the machine $ 12.500

Less: Discount  250

Net purchase price  12,250

Assembly 475

Freight charges 360

Materials used in adjusting 40

Mounting and power connections 895

0

0

Total cost to be recorded $14,020

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