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