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Identify and compute the cost of the machine

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Question - On 1 May 2020, Ron Trading purchased a new machine. The following payments relate to the machine.

List price $21,500

Purchase discount 2.000

Transportation cost 300

Repair of damage parts incurred in transporting the machine 1,000

Fees paid to test the machine before use 500

Fees paid to the installer to install the machine 800

Machine operator's salary for the first month of operation 3,000

Maintenance costs for the first month of operation 300

Required - Identify and compute the cost of the machine to be recognised. Explain your reasoning. Journalise the transactions. Assume the above payments are paid in cash.

Reference no: EM132539966

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