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27 July, 06:03

On October 1, 20X4, Shaw Corp. purchased a machine for $126,000 that was placed in service on November 30, 20X4. Shaw incurred additional costs for this machine, as follows: Shipping $ 3,000 Installation 4,000 Testing 5,000 In Shaw's December 31, 20X4 Balance Sheet, the machine's cost should be reported as:A. $126,000B. $129,000C. $133,000D. $138,000

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  1. 27 July, 06:14
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    option (D) $138,000

    Explanation:

    Data provided in the question:

    Purchasing cost of the machine = $126,000

    Additional costs for this machine:

    Shipping = $3,000

    Installation = $4,000

    Testing = $5,000

    Now,

    The cost of machine that should be reported

    = Purchasing cost + Additional costs incurred

    = $126,000 + $3,000 + $4,000 + $5,000

    = $138,000

    Hence,

    The correct answer is option (D) $138,000
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