Question

Dalton Resources Co. purchased a machine for $15,000, terms 2/10, n/60, FOB shipping point. The seller prepaid the freight charges, $260, adding the amount to the invoice and bringing its total to $15,260. The machine required a special steel mounting and power connections costing $795, and another $375 was paid to assemble the machine and get it into operation. In moving the machine onto its steel mounting, it was dropped and damaged. The repairs cost $190. Later, $120 of raw material was consumed in adjusting the machine so that it would produce a satisfactory product. The adjustments were normal for this type of machine and were not the result of the damage. However, the items produced while the adjustments were being made were not saleable. Prepare a calculation to show the cost of this machine for accounting purposes. (Assume Dalton Resources pays for the purchase within the discount period.)



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  • CreatedJanuary 08, 2015
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