acquisition Cost of Long-Lived AssetThe following data relate to a firm’s purchase of a machine used in the manufacture of its product:Invoice price$34,000Applicable sales tax2,000Cash discount taken for prompt payment400Freight paid260Cost of insurance coverage on machine while in transit125Installation costs2,000Testing and adjusting costs475Repair of damages to machine caused by the firm’s employees750Prepaid maintenance contract for first year of machine’s use400 Determine the acquisition cost of the machine.Acquisition Cost = $Answer

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Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles

Section: Chapter Questions

Problem 8.1E

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acquisition Cost of Long-Lived Asset

The following data relate to a firm’s purchase of a machine used in the manufacture of its product:

Invoice price	$34,000
Applicable sales tax	2,000
Cash discount taken for prompt payment	400
Freight paid	260
Cost of insurance coverage on machine while in transit	125
Installation costs	2,000
Testing and adjusting costs	475
Repair of damages to machine caused by the firm’s employees	750
Prepaid maintenance contract for first year of machine’s use	400

Determine the acquisition cost of the machine.

Acquisition Cost = $Answer

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