Desert Company purchased a machine with a contract price of $100,000 on terms of 2/10, n/30. The company did not take the cash discount. Transportation costs of $2,500 were incurred, as well as installation and testing costs of $3,000. Sales tax was 7% of invoice price. During the installation, uninsured damages of $500 were incurred and paid by Desert. Determine the original cost of the machine and record the journal entry.

Desert Company purchased a machine with a contract price of $100,000 on terms of 2/10, n/30. The company did not take the cash discount. Transportation costs of $2,500 were incurred, as well as installation and testing costs of $3,000. Sales tax was 7% of invoice price. During the installation, uninsured damages of $500 were incurred and paid by Desert. Determine the original cost of the machine and record the journal entry.

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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