On March 1,Bartholomew Company purchased a new stamping machine with a list price of $34,000.The company paid cash for the machine;therefore,it was allowed a 5% discount.Other costs associated with the machine were: transportation costs,$550;sales tax paid,$1,360;installation costs,$450;routine maintenance during the first month of operation,$500.The cost recorded for the machine was:
A)$34,210.
B)$32,300.
C)$35,160.
D)$34,660.

Question

Quizplus · Accepted Answer

The cost recorded for the machine can be calculated as follows:

List price of the machine = $34,000
Discount allowed (5% of list price) = $1,700
Net cost of the machine = $32,300

Other costs associated with the machine:

Transportation costs = $550
Sales tax paid = $1,360
Installation costs = $450
Routine maintenance during the first month of operation = $500

Total cost of the machine = $32,300 + $550 + $1,360 + $450 + $500 = $34,160

Therefore, the cost recorded for the machine is $34,660 which is closest to option D.

On March 1,Bartholomew Company Purchased a New Stamping Machine with a List