On August 1, 2017, Mendez Corporation purchased a new machine on a deferred paym

Question

On August 1, 2017, Mendez Corporation purchased a new machine on a deferred payment basis. A down payment of $4,000 was made and 4 annual installments of $24,000 each are to be made beginning on September 1, 2017. The cash equivalent price of the machine was $92,000. Due to an employee strike, Mendez could not install the machine immediately, and thus incurred $1,200 of storage costs. Costs of installation (excluding the storage costs) amounted to $3,200. The amount to be capitalized as the cost of the machine is

$92,000.

$95,200.

$96,400.

$104,000.

$92,000.

$95,200.

$96,400.

$104,000.

Explanation / Answer

Ans Option B $95200 explanation cost of the machine to be capitalized= Cash equivalent price of the machine+cost of installation $9200+3200 $95,200

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.