Initial Cost of Long Lived Assets Video Lessons

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Problem: A company purchased for cash a machine with a list price of $120,000, upon which a 25% trade discount was applied. The machine was shipped FOB shipping point at a cost of $5,000. Installation and test runs of the machine cost $3,000. The recorded acquisition cost of the machine is: a. $98,000. b. $128,000. c. $90,000. d. $93,000.

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Problem Details

A company purchased for cash a machine with a list price of $120,000, upon which a 25% trade discount was applied. The machine was shipped FOB shipping point at a cost of $5,000. Installation and test runs of the machine cost $3,000. The recorded acquisition cost of the machine is:

a. $98,000.

b. $128,000.

c. $90,000.

d. $93,000.

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