On April 1, 2016, Bennett Corporation Purchased a New Machine

question 27

Multiple Choice

On April 1, 2016, Bennett Corporation purchased a new machine on a deferred payment basis. A down payment of $5,000 was made and 10 monthly installments of $14,000 each are to be made beginning on May 1, 2016. The cash equivalent price of the machine was $130,000. Bennett incurred and paid installation costs amounting to $6,000. The amount to be capitalized as the cost of the machine is

• A) $130,000
• B) $136,000
• C) $145,000
• D) $151,000

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Definitions:

Photoreceptor Cells

Specialized neurons in the retina that convert light into electrical signals, enabling vision.

Tinnitus

A condition characterized by hearing noises (such as ringing, buzzing, or humming) in the ears when no external sound is present.

Nystagmus

An involuntary, rapid movement of the eyeballs, which can be horizontal, vertical, or rotary.

Otitis Media

An infection or inflammation of the middle ear.