Question

On March 1, Bartholomew Company purchased a new stamping machine with a list price of $87,000. The company paid cash for the machine; therefore, it was allowed a 5% discount. Other costs associated with the machine were: transportation costs, $3,000; sales tax paid, $6,520; installation costs, $1,850; routine maintenance during the first month of operation, $2,900. What is the cost of the machine

Answer 1

$94,020

Step-by-step explanation:

Calculation for the cost of the machine using the formula below:

Cost of the machine = New stamping machine - (New stamping machine × Discount percentage) + Transportation + Sales tax + Installation

= $87,000 - ($87,000 × 5%) + $3,000 + $6,520 + $1,850

= $87,000 - $4,350 + $3,000 + $6,520 + $1,850

= $94,020

Therefore, cost of the machine is $94,020