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On March 1, Bartholomew Company purchased a new stamping machine with a list price of $83,000. The company paid cash for the machine; therefore, it was allowed a 5% discount. Other costs associated with the machine were: transportation costs, $2,600; sales tax paid, $5,720; installation costs, $1,650; routine maintenance during the first month of operation, $2,500. What is the cost of the machine?

Respuesta :

Answer:

$88,820

Explanation:

The computation of the cost of the machine is shown below:

= List price - discount allowed + transportation + sales tax paid + installation cost

where,

List price is $83,000

Discount allowed

= $83,000 × 5%

= $4,150

And, the other items would remain the same

So, the cost of the machine is

= $83,000 - $4,150 + $2,600 + $5,720 + $1,650

= $88,820

All other expenses should be ignored as it is not relevant

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