Washamoto Ltd took delivery of a microcomputer and printer on 1 July 20X6, the beginning of its financial year. The list price of the equipment was sh4,999 but Washamoto Ltd was able to negotiate a price of sh4,000 with the supplier. However, the supplier charged an additional sh340 to install and test the equipment. The supplier offered a 5% discount if Washamoto Ltd paid for the equipment and the additional installation costs within seven days. Washamoto Ltd was able to take advantage of this additional discount. The installation of special electrical wiring for the computer cost sh110. After initial testing certain modifications costing sh199 proved necessary. Staff were sent on special training courses to operate the microcomputer and this cost sh 990. Washamoto Ltd insured the machine against fire and theft at a cost of sh 49 per annum. A maintenance agreement was entered into with Sonoma plc. Under this agreement Sonoma plc. Promised to provide 24 hour breakdown cover for one year. The cost of the maintenance agreement was sh350.Required:Calculate the acquisition cost of the microcomputer to Washamoto Ltd.

Required:Compute the cost of acquisition of the microcomputer to Washamoto Ltd.

Answered: Washamoto Ltd took delivery of a…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 12EA: Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a...

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Washamoto Ltd took delivery of a microcomputer and printer on 1 July 20X6, the beginning of its financial year. The list price of the equipment was sh4,999 but Washamoto Ltd was able to negotiate a price of sh4,000 with the supplier. However, the supplier charged an additional sh340 to install and test the equipment. The supplier offered a 5% discount if Washamoto Ltd paid for the equipment and the additional installation costs within seven days. Washamoto Ltd was able to take advantage of this additional discount. The installation of special electrical wiring for the computer cost sh110. After initial testing certain modifications costing sh199 proved necessary. Staff were sent on special training courses to operate the microcomputer and this cost sh 990. Washamoto Ltd insured the machine against fire and theft at a cost of sh 49 per annum. A maintenance agreement was entered into with Sonoma plc. Under this agreement Sonoma plc. Promised to provide 24 hour breakdown cover for one year. The cost of the maintenance agreement was sh350.

Required:

Calculate the acquisition cost of the microcomputer to Washamoto Ltd.

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