Answer:
Explanation:
List Price $34,000
Discount($34,000*5%) (1,700)
Transpiration $550
Sales Tax $1,360
Installation Cost $450
Total Cost of Machine $34,660
Please note that maintenance cost is revenue expense therefore excluded from cost of machine.
Answer:
Explanation:
The cost principle states that costis recorded at the price actually paid for an item. The routine maintenance cost is not added to the asset acquisition cost because it is not a fsctor for the acquisition of the stamping machine.
Computation for asset Acquisition Cost:
Particulars . Amount
Purchase Cost $34,000
Add: Freight-in Expense
$550
Add: Installation Cost $450
Less: Purchase Discount ($34,000 x 5%) = $1,700
Add: Sales Tax Paid $1,360
Total: Asset Acquisition Cost $34,660
