1. 2.00 vnlue: points Rizio Co. purchases a machine for $12,900, terms 1/10, n/6

Question

1. 2.00 vnlue: points Rizio Co. purchases a machine for $12,900, terms 1/10, n/60, FOB shipping point. The seller prepaid the $292 freight charges, adding the amount to the invoice and bringing its total to $13,192. The machine requires special steel mounting and power connections costing $892. Another $421 is paid to assemble the machine and get it into operation. In moving the machine to its steel mounting, $345 in damages occurred. Materials costing $40 are used in adjusting the machine to produce a satisfactory product. The adjustments are normal for this machine and are not the result of the damages. Complete the below table to calculate the cost recorded for this machine. (Rizio pays for this machine within the cash discount period.) nt Included in Cost of Equipment: Invoice price of machine Net purchase price Total cost to be recorded Hints References Book & Resources Hint#1

Explanation / Answer

Q1. Invoice price of machine 12900 Less: Discount 129 Net purchase price 12771 Add: Additional expense Freight charges 292 Special mounting and pwer connections 892 Assembling cost 421 Material used in adjustment required 40 1645 Total cost to be rcorded 14416

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