Question

Exercise 10-1 Cost of plant assets LO C1 Rizio Co. purchases a machine for $12,200, terms 1/10, n/60, FOB shipping point. The seller prepaid the $276 freight charges, adding the amount to the invoice and bringing its total to $12,476. The machine requires special steel mounting and power connections costing $843. Another $398 is paid to assemble the machine and get it into operation. In moving the machine to its steel mounting. $290 in damages occurred. Materials costing $40 are 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. Complete the below table to calculate the cost recorded for this machine. (Rizio pays for this machine within the cash discount period.) Amount Included in Cost of Equipment: es Invoice price of machine Net purchase price 0 0 $ Total cost to be recorded

Answer 1

SOLUTION

Exercise 10-1

Particulars	Amount ($)
Invoice price of machine	12,200
Less: Discount (12,200*1%)	122
Net purchase price	12,078
Assemble	398
Freight charges	276
Materials used in adjusting	40
Mounting and power connections	843
Total cost to be recorded	13,635

** All the questions are independent to each other, so as per HOMEWORKLIB RULES I have answered first question.