Question

Triangle Company, acquired a machine that involved the following expenditures and related factors:

Gross invoice price	$228,000
Sales tax	8,500
Cash discount taken	3,420
Freight	4,050
Assembly of machine	5,400
Installation of machine	8,100
Assorted spare parts for future use	16,200
Tuning and adjusting machine before use	2,700

The initial accounting cost of the machine should be:

Select one:

A. $203,220

B. $253,330

C. $180,180

D. $196,380

Answer 1

Answer: B. $253,330

Explanation

Initial Accounting Cost of Machine
	$
Gross invoice price	228,000.00
Add:
Sales tax	8,500.00
Freight	4,050.00
Assembly of machine	5,400.00
Installation of machine	8,100.00
Tuning and adjusting machine before use	2,700.00
	256,750.00
Less: Cash discount taken	(3,420.00)
Total	253,330.00