Question

Granite Company purchased a machine costing $136,000, terms 2/10, n/30. The machine was shipped FOB shipping point and freight charges were $3,600. The machine requires special mounting and wiring connections costing $11,600. When installing the machine, $3,100 in damages occurred. Compute the cost recorded for this machine assuming Granite paid within the discount period.

Answer 1

The machine will enter as 148,480

Step-by-step explanation:

We should enter the machine as the sum of all cost incurred to get the machine ready for use in behalf of the company.

Purchase cost: 136,000 x (1 - 0.02) = 133,280

shipping cost: (freigh-in) 3,600

installation cost: 11,600

Total cost: 148,480

The damages will be cost of the period, therefore expenses.

It weren't necessary for the installation of the machine.