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1. Compute the amount recorded as the cost of a new machine used in the production process of a company, given the following payments related to its purchase: Purchase Price Sales Tax Purchase Discount Taken Transit Costs Assembly &Testing Costs Cost of Necessary Machine Platform $700,000 50,000 10,000 $ 2,500 $ 5,000 $2,500 Cost of Maintenance Parts for A1l Machines 4,200 Calculate the cost of the machine that should be capitalized.
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Calculation of Cost of machine Should be Capitalised Particulars Amount Dollars Purchase price Sales Tax Transit Costs Assembly and Testing Costs Cost of Necessary Platform $700,000.00 50,000.00 $2,500.00 $5,000.00 $2,500.00 760,000.00 10,000.00 750,000.00 Gross Total Less: Purchase Discount Net Cost to be Capitalised as Cost of Asset

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