Granite Company purchased a machine costing $132,000, terms 1/10, n/30. The machine was shipped FOB shipping point and freight charges were $3,200. The machine requires special mounting and wiring connections costing $11,200. When installing the machine, $2,700 in damages occurred. Compute the cost recorded for this machine assuming Granite paid within the discount period.

Granite Company purchased a machine costing $132,000, terms 1/10, n/30. The machine was shipped FOB shipping point and freight charges were $3,200. The machine requires special mounting and wiring connections costing $11,200. When installing the machine, $2,700 in damages occurred.The Total cost recorded to get the ready to use:  $ 147,780

Explanation:

From the above question we get the following information

Equipment cost: 132,000 x (1 - 1%) = 130,680

shipping cost:                                        3,200

special wiring connections                 11,200

installation cost                                      2,700  

Total cost to get the machinery  ready to use:      $ 147,780

It is important to note that the  cost incurred to get the equipment ready for usage  and production must be included while calculating the equipment cost.

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