Mount Company purchased a machine at an invoice cost of $21,000 subject to terms of 3/10,n/30.The discount was taken.Additional costs were installation,$1200; insurance on the machine after it was in operation,$370.The total cost to be added to the machinery account is:

Question

Quizplus · Accepted Answer

Invoice cost = $21,000 
Discount = 3% of $21,000 = $630 
Net invoice cost = $21,000 - $630 = $20,370

Additional costs = $1,200 + $370 = $1,570

Total cost to be added to the machinery account = Net invoice cost + additional costs 
= $20,370 + $1,570 = $21,940

Therefore, the correct answer is (C) $21,570.

Mount Company Purchased a Machine at an Invoice Cost of $21,000