Question

Exercise 10-1 Cost of plant assets cil Rizio Co. purchases a machine for $12,500, terms 210, n60, FOB shipping point. Rizio paid within the discount period and took the $250 discount. Transportation costs of $360 were paid by Rizio. The machine required mounting and power connections costing $895. Another $475 is paid to assemble the machine, and $40 of materials are used to get it into operation. During installation, the machine was damaged and $180 worth of repairs were made. Compute the cost recorded for this machine.

Answer 1

Answer- Cost of machine =$14020.

Explanation-

Cost of Machine
Particulars	Amount
	$
Invoice price of machine	12500
Less- Discount	250
Net purchase price	12250
Add- Transportation costs	360
Mounting & power connections	895
Assembly costs	475
Materials costs	40
Cost of Machine	14020