Blossom Limited purchased a machine on account on April 1, 2021, at an invoice price of $380,660. On April 2, it paid $2,180 for delivery of the machine. A one-year, $3,840 insurance policy on the machine was purchased on April 5. On April 19, Blossom paid $8,270 for installation and testing of the machine. The machine was ready for use on April 30. Blossom estimates the machine's useful life will be five years or 6,535 units with a residual value of $81,210. Assume the machine produces the following numbers of units each year: 1,014 units in 2021; 1,535 units in 2022: 1,517 units in 2023; 1.279 units in 2024: and 1.190 units in 2025. Blossom has a December 31 year end. (a) Determine the cost of the machine.

Blossom Limited purchased a machine on account on April 1, 2021, at an invoice price of $380,660. On April 2, it paid $2,180 for delivery of the machine. A one-year, $3,840 insurance policy on the machine was purchased on April 5. On April 19, Blossom paid $8,270 for installation and testing of the machine. The machine was ready for use on April 30. Blossom estimates the machine's useful life will be five years or 6,535 units with a residual value of $81,210. Assume the machine produces the following numbers of units each year: 1,014 units in 2021; 1,535 units in 2022: 1,517 units in 2023; 1.279 units in 2024: and 1.190 units in 2025. Blossom has a December 31 year end. (a) Determine the cost of the machine.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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