Mount Company purchased a machine at an invoice cost of $25,000 subject to terms of 2/10, n/30. The discount was taken. Additional costs were installation, $1000; insurance on the machine after it was in operation, $500. The total cost to be added to the machinery account is:

$24,500

$25,500

$26,500

$26,000

2-The cost of a plant asset did NOT include installation costs that were expensed. This error would cause:

the period's net income to be overstated.

the period's net income to be understated.

the period end assets to be understated.

Both B and C are correct.