Danube corp. purchased a used machine for $ 10 comma 000. the machine required installation costs of $ 4 comma 000 and insurance while in transit of $ 500. at which of the following amounts would the machine be recorded? a. $ 10 comma 000 b. $ 14 comma 500 c. $ 14 comma 000 d. $ 10 comma 500

The correct answer is B. $14,500

Explanation:

According to the accounting concept, the machines cost includes all those cost which is related to the machine like -  purchase cost of machine, installation cost of machine, insurance cost,etc.

So,

Total cost of machine = Purchase cost of machine + installation cost of machine +  insurance cost

= $10,000 + $4,000 + $500

= $14,500

Hence, the total machine cost is $14,500 which is to be recorded in the financial statements.

Thus, the correct answer is B. $14,500

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