Question

Bonita Industries purchased a new machine on October 31, 2020. A $4900 down payment was made and three monthly installments of $820 each are to be made beginning on November 30, 2020. The cash price would have been $47000. Bonita paid no installation charges under the monthly payment plan but an $820 installation charge would have been incurred with a cash purchase. The amount to be capitalized as the cost of the machine on October 31, 2020 would be:______

Answer 1

$47,820

Step-by-step explanation:

1.Cash price of the machine $47,000

Add Installation cost $820

Total$47,820

Therefore the amount to be capitalized as the cost of the machine on October 31, 2020 would be: $47,820