The following data relate to a firm’s purchase of a machine used in the manufacture of its product: Invoice Price $30,000 Applicable sales tax $2,000 Cash discount taken for prompt payment $400 Freight paid $260 Cost of Insurance coverage on machine while in transit $125 Installation costs $3,000 Testing and adjusting costs $475 Repair of damages to machine caused by the firm’s employee $750 Prepaid maintenance contract for the first year of machine’s use $300 Determine the acquisition cost of the machine
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Acquisition Cost of Long-Lived Asset
The following data relate to a firm’s purchase of a machine used in the manufacture of its product:
Invoice Price $30,000
Applicable sales tax $2,000
Cash discount taken for prompt payment $400
Freight paid $260
Cost of Insurance coverage on machine while in transit $125
Installation costs $3,000
Testing and adjusting costs $475
Repair of damages to machine caused by the firm’s employee $750
Prepaid maintenance contract for the first year of machine’s use $300
Determine the acquisition cost of the machine
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