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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
i need the answer quickly
Transcribed Image Text: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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education