Granite Company purchased a machine costing $125,000, terms 3/10, n/30. The machine was shipped FOB shipping point and freight charges were $2,500. The machine requires special mounting and wiring connections costing $10,500. When installing the machine, $2,000 in damages occurred. Compute the cost recorded for this machine assuming Granite paid within the discount period.

Multiple Choice

• $133,750.

• $141,800.

• $138,050.

• $134,250.

• $134,450.

Wallace and Simpson formed a partnership with Wallace contributing $100,000 and Simpson contributing $80,000. Their partnership agreement calls for the income (loss) division to be based on the ratio of capital investments. The partnership had income of $135,000 for its first year of operation. When the Income Summary is closed, the journal entry to allocate partner income is: (Do not round intermediate calculations.)

Multiple Choice

• Debit Income Summary $135,000; credit Wallace, Capital $75,000; credit Simpson, Capital $60,000.

• Debit Wallace, Capital $67,500; debit Simpson, Capital $67,500; credit Income Summary $135,000.

• Debit Cash $135,000; credit Wallace, Capital $75,000; credit Simpson, Capital $60,000.

• Debit Income Summary $135,000; credit Wallace, Capital $67,500; credit Simpson, Capital $67,500.

• Debit Wallace, Capital $75,000; debit Simpson, Capital $100,000; credit Cash $135,000.