On March 1, Bartholomew Company purchased a new stamping machine with a list price of $70,000. The company paid cash for the machine; therefore, it was allowed a 5% discount. Other costs associated with the machine were: transportation costs, $1,300; sales tax paid, $3,120; installation costs, $1,000; routine maintenance during the first month of operation, $1,200. The cost recorded for the machine was:

Question

Quizplus · Accepted Answer

List price of the stamping machine = $70,000
Discount allowed = 5%
Amount paid after discount = $70,000 x 0.95 = $66,500

Other costs:
Transportation costs = $1,300
Sales tax paid = $3,120
Installation costs = $1,000
Routine maintenance during the first month of operation = $1,200

Total cost recorded for the machine = $66,500 + $1,300 + $3,120 + $1,000 + $1,200 = $73,120

Therefore, the cost recorded for the machine was $73,120, which is option D.

On March 1, Bartholomew Company Purchased a New Stamping Machine