1. Grab Manufacturing Co. purchased a 10-ton draw press at a cost of $189,000 wi
ID: 2451151 • Letter: 1
Question
1. Grab Manufacturing Co. purchased a 10-ton draw press at a cost of $189,000 with terms of 4/15, n/45. Payment was made within the discount period. Shipping costs were $4,500, which included $200 for insurance in transit. Installation costs totaled $11,200, which included $3,500 for taking out a section of a wall and rebuilding it because the press was too large for the doorway. The capitalized cost of the 10-ton draw press is:
a) $198,640
b) $197,140
c) $181,440
d) $193,640
1. Grab Manufacturing Co. purchased a 10-ton draw press at a cost of $189,000 with terms of 4/15, n/45. Payment was made within the discount period. Shipping costs were $4,500, which included $200 for insurance in transit. Installation costs totaled $11,200, which included $3,500 for taking out a section of a wall and rebuilding it because the press was too large for the doorway. The capitalized cost of the 10-ton draw press is:
a) $198,640
b) $197,140
c) $181,440
d) $193,640
Explanation / Answer
Purchase Price 189,000
Discount 4 % 7,560
Discounted Purchase Price 1,81,440
Delivery costs =Shipping costs =4,500
Installation costs =11,200
Capitalized cost =1,81,440 +4,500 + 11,200=1,97,140
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