McDonald Inc acquired a machine that involved the following

McDonald Inc. acquired a machine that involved the following expenditures and related factors: Required: Compute the cost of the machine that should be recorded as an asset. (Show your work below to received credits).

Solution

MC Donald Inc. $ Cost of machine: Invoice price 13,600 Sales Tax 880 Frieght charges 480 Assembly charges 400 Installation charges 600 Runing and adjt cost 320 16,280 Asset value 16,280 Revenue charges To repair during installation 1280 By cash discount 272 Revenue charges adjusted with P & L Account.