A company purchased equipment on account for $25,000.By paying within the discount period,they saved 1%.In addition,the company paid $1,500 to have the equipment delivered and $500 to have it installed.In setting up the machine,the maintenance assistant caused $300 in damages which was repaired before the machine was put into service.The cost of this asset for financial accounting purposes is

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The cost of the asset includes the purchase price minus any discounts, plus delivery and installation costs. The discount saved is $250 (1% of $25,000), so the purchase price is $24,750. Adding delivery ($1,500) and installation ($500) costs, the total cost is $26,750. The damage repair cost is not included as it is not necessary to bring the asset to its intended use.

A Company Purchased Equipment on Account for $25,000